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Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent...

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Accounting

Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format
income statement follows:
A study indicates that $373,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that winue
even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 13% decrease in the
sales of the Hardware Department.
Required:
What is the financial advantage (disadvantage) of discontinuing the Linens Department?
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