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$ 420,000 $ 132,000 43,000 23,000 198,000 222,000 for the vuar ter neu March 31 Sales Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total
$ 420,000 $ 132,000 43,000 23,000 198,000 222,000 for the vuar ter neu 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 24,000 104,000 41,000* 118,000 9,000 48,0001 344,000 $ (122,000) *Common costs allocated on the basis of machine-hours. tCommon 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? Answer is not complete. Financial (disadvantage)
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