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Contribution margin lost if linen department is dropped
Lost from the linen department $600,000
Lost from the hardware department(2,100,000*10%) $210,000
Total lost contribution margin $810,000
Less. Avoidable fixed cost($800,000-340000) $460,000
Disadvantage of discontinuing linen dept. $350,000
Check my work Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's...
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 $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: What is the financial advantage (disadvantage) of discontinuing...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,310,000 $ 3,150,000 $ 1,160,000 1,319,000 912,000 407,000 2,991,000 2,238,000 753,000 2,270,000 1,370,000 900,000 $ 721,000 $ 868,000 $ (147,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even...
Managerial Accounting Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows Department Total Hardware Linens Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $4,320,000 $ 3,140,000 $ 1,180,000 420,000 760,000 810,000 1,273,000e 3,047,000 2, 287,000 2,150,000 1, 340,000 853,000 $ 897,000 $ 947,000 $(50,000) A study indicates that $376,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,340,000 $ 3,180,000 $ 1,160,000 Variable expenses 1,218,000 808,000 410,000 Contribution margin 3,122,000 2,372,000 750,000 Fixed expenses 2,240,000 1,340,000 900,000 Net operating income (loss) $ 882,000 $ 1,032,000 $ (150,000 ) A study indicates that $376,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,350,000 $ 3,190,000 $ 1,160,000 Variable expenses 1,309,000 908,000 401,000 Contribution margin 3,041,000 2,282,000 759,000 Fixed expenses 2,350,000 1,450,000 900,000 Net operating income (loss) $ 691,000 $ 832,000 $ (141,000 ) A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,180,000 $ 3,050,000 $ 1,130,000 Variable expenses 1,233,000 830,000 403,000 Contribution margin 2,947,000 2,220,000 727,000 Fixed expenses 2,270,000 1,370,000 900,000 Net operating income (loss) $ 677,000 $ 850,000 $ (173,000 ) A study indicates that $376,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,230,000 $ 3,050,000 $ 1,180,000 Variable expenses 1,258,000 839,000 419,000 Contribution margin 2,972,000 2,211,000 761,000 Fixed expenses 2,250,000 1,440,000 810,000 Net operating income (loss) $ 722,000 $ 771,000 $ (49,000 ) A study indicates that $371,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Hardware Linens Total $ 4,240,000 $ 3,120,000 ş1,120,000 Sales Variable expenses 1,335,000 934,000 401,000 Contribution margin 2,186,000 719,000 2,905,000 Fixed expenses 2,130,000 1,330,000 800,000 775,000 $ 856,000 $ Net operating income (loss) (81,000) 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...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Department Total Hardware Linens $ 4,290,000 $3,150,000 $ 1,140,000 1,396,000 986,000 410,000 2,894,000 2,164,000 730,000 2,320,000 1,430,000 890,000 $ 574,000 $ 734,000 $ (160,000) Net operating income (loss) A study indicates that $376,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,290,000 $ 3,110,000 $ 1,180,000 1,403,000 985,000 418,000 2,887,000 2,125,000 762,000 2,210,000 1,370,000 840,000 $ 677,000 $ 755,000 $ (78,000) A study indicates that $380,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even...