Exercise 11-15 Dropping or Retaining a Segment [Lo11-2] 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 purnp product line follows: Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses: $850,ee0 Variable manufacturing expenses Sales commissions Shipping $330,000 42,000 18,900 Total variable expenses Contribution margin Fixed expenses: 390,e00 460,e80 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 270,e00 , 105,800 32,080 8,000 45,ee0 Total fixed expenses Net operating loss $ (8e, ee0) Common costs allocated on the basis of machine-hours. $ (88,800) Common costs allocated on the basis of machine-hours Common costs allocated on the basis of sales dollars. Discontinuing the bilige 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? K Prev12 of 13 Next re to search