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 27, ga 119, see 37, see 128.000 7.000 sa,000 368,000 $(123, "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 total general factory overhead or total Purchasing Department expenses Required: What is the financial advantage (disadvantage of discontinuing the bilge pump product line? Exercise 12-17 Dropping or Retaining a Segment (LO12-2] Bed & Bath, a retalling company has two departments Hardware and Linens. The company's most recent monthly contribution forma income statement follows: Sales Varkable expenses Contribution margin Fixed expenses Net operating Incore loss) Total $ 4,240,000 1.260,eee 2,980,000 2,290 Department Handuare Linens $3,130,00 $ 1,110, 849,000 411,000 2,281,008 699,Bee 1, n . 898, 690.000 $ 81,ede (191,00) A study indicates that $276.000 of the fixed expenses being charged to Liners are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Liners Department will result in a 13% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage of discontinuing the linens Department? ere to search WEIRUL Bed & Bath, a retailing company has two departments Hardware and Linens. The company's most recent monthly contribution format income statement follows: Dartant $ $ Total 4,740.000 1, 268, 2,900,000 2,298,00 690, Sales Variable expenses Contribution wargin Fixed expenses Net operating income (less) Hardware 5.110,000 249,00 2,281,000 1 ,000 881.000 Linens 1,111, 411,eee 699.000 $ (191000) A study indicates that $376,000 of the fixed expenses being charged to Linens are sunk costs of allocated costs that will continue even if the Liners Department is dropped. In addition the elimination of the Linens Department will result in a 13 decrease in the sales of the Hardware Department Required: What is the financial advantage disadvantage of discontinuing the Linens Department? ype here to search J_ WELRUL ALS I DELO FOR