12 Thalassines kataskeves, S.A, of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows: 2 points $ 500,000 8 01:5252 $ 139,000 44,000 19.000 196,000 304,000 Thalassines kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Fixed expenses: Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department Total fixed expenses Net operating loss "Common costs allocated on the basis of machine-hours. Common costs allocated on the basis of sales dollars 28,000 110,000 35,000 128,000 14,000 50,000 365,000 (61.000) Discontinuina the biloe Dumo product line would not affect sales of other product lines and would have no effect on 12 Total fixed expenses 365,000 Net operating loss $ (61,000) "Common costs allocated on the basis of machine-hours. Common costs allocated on the basis of sales dollars. Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company's total general factory overhead or total Purchasing Department expenses Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line? ints 0152:29