Bed & Bath, a retailing company, has two departments$$Hardware and Linens. The company$$s most recent monthly contribution format income statement follows:

Total Department

Hardware Linens

Sales $ $4,000,000$ $ $3,000,000$ $ $1,000,000$

Variable expenses $1,300,000900,000400,000$

Contribution margin $2,700,0002,100,000600,000$

Fixed expenses $2,200,0001,400,000800,000$

Net operating income $($loss$)$ $ $500,000$ $ $700,000$ $ $(200,000)$

A study indicates that $$340,000$ of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a $10\%$ decrease in the sales of the Hardware Department.

Required:

$1.$ The company used the above information to calculate the financial impact of dropping the Linens Department. It depicted its financial analysis using the data visualization shown below. Review the Tableau visualization, and answer the questions that follow.

Based on the visualization:

The relevant fixed cost in the decision to discontinue the Linens Department is:

multiple choice $1$

$$340,000.$

$$460,000.$

$$800,000.$

$$600,000.$

The total foregone contribution margin associated with dropping the Linens Department is:

multiple choice $2$

$$(810,000)$

$$(600,000)$

$$(210,000)$

$$(350,000)$

Which of the following statements is true?

multiple choice $3$

Discontinuing the Linens Department provides a financial advantage of $$150,000.$

Discontinuing the Linens Department provides a financial $($disadvantage$)$ of $$(150,000).$

Discontinuing the Linens Department provides a financial advantage of $$350,000.$

Discontinuing the Linens Department provides a financial $($disadvantage$)$ of $$(350,000).$