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

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Bed & Bath, a retailing company, has two departments—Hardware and Linens. The companys most recent monthly contribution form

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Answer 1

Answer #1

New contribution margin for Hardware would be=$2,164,000*(1-Decrease in Growth rate)

=$2,164,000*(1-0.18)=1774480

Less:Fixed costs for Hardware=1,430,000

Net operating income for Hardware=344480

Less:Unavoidable fixed costs for Linens=(376,000)

Total net operating income would be=$(31520)

Hence financial disadvantage=(574,000-(31520)

=$605520

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Answer 2

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