Please do not give solution in image format thanku Assume a retailing company has twodepartments Department A and DepartmentB. The company's most recent contributionformat income statement follows:SalesVariableexpensesContributionmarginFixedexpensesNetoperatingincome(loss)TotalDepartment DepartmentAB$$800,000 350,000320,000 120,000 200,000480,000 230,000400,000 140,000$80,000$450,000$ 90,000250,000260,000$(10,000)The company says that $140,000 of the fixedexpenses being charged to Department B aresunk costs or allocated costs that will continue ifthe segment is discontinued. However, ifDepartment B is discontinued the sales inDepartment A will drop by 8%. What is thefinancial advantage (disadvantage) ofdiscontinuing Department B?

The phrase "relevant cost" in management accounting refers to avoidable expenses that are only…

Assume a retailing company has two departments Department A and Department B. The company's most recent contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total Department Department A B $ $ 800,000 350,000 320,000 120,000 200,000 480,000 230,000 250,000 400,000 140,000 $ 80,000 $ 450,000 $ 90,000 260,000 $ (10,000) The company says that $140,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department B is discontinued the sales in Department A will drop by 8%. What is the financial advantage (disadvantage) of discontinuing Department B?