please help Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution formatincome statement follows:DepartnentHardware$4,200, e00 $3,030, 000 $1,170, 000987,0002,043,0001,390, 000$ 525, 000 s 653,000 S (128,000)TotalLinensSalesVariable expensesContribution marginFixed expenses1,405, e002,795, 0002,270, 000418, 000752, 000880, 000Net operating income (loss)A study indicates that $377,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continueeven if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 17% decrease in thesales of the Hardware Department.Required:What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Calculation of Sales and Variable Cost of Hardware if Linens department is discontinued Revised…

Bed & Bath, a retailing company, has two departments-Hardware and Linens, The company's most recent monthly contribution format income statement follows: Departnent Total $4,200, 000 s 3,030, 000 $ 1, 170,000 1,405, 000 2,795, 000 2,270, 000 Hardware Linens Sales Variable expenses Contribution margin 987,000 418, 000 2,043,000 1,390, 000 $ 525, 000 S 653,000 S (128,000) 752, 000 880, 000 Fixed expenses Net operating income (loss) A study indicates that $377,000 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 17% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Bed & Bath, a retailing company, has two departments-Hardware and Linens, The company's most recent monthly contribution format income statement follows: Departnent Total $4,200, 000 s 3,030, 000 $ 1, 170,000 1,405, 000 2,795, 000 2,270, 000 Hardware Linens Sales Variable expenses Contribution margin 987,000 418, 000 2,043,000 1,390, 000 $ 525, 000 S 653,000 S (128,000) 752, 000 880, 000 Fixed expenses Net operating income (loss) A study indicates that $377,000 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 17% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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