exercise 12-15 Dropping or retaining a segment

12 Homework Help Seve & Exit Submit Exercise 12-15 Dropping or Retaining a Segment (LO12-2 Thaiassines Kataskeves, S.A, of Greece makes marine equipment. The company has been experiencing losses on ins bilge pump product line for several years. The most recent quarterly contribution format income statement for the blige pump product line follows Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses: 400,000 Variable manufacturing expenses Sales commissions Shipping 129,008 47,000 18,990194.8ae Total variable expenses Contribution margin Fixed expenses 206,000 Advertising (for the bilge pump product 1ine) Depreciation of equipment (no resale value) 22,000 48,000 128,000 9,000 se,eee General factory overhead Salary of product-line manager Insurance on inventories Purchasing department Prev 1 of Next > 8 5 6 8 9 0 ord Eror ! https/inewcorrect 2 Homework Help 5Save & Exit Submit Check my General factory overhead 48,000 128,000 9,880 se,eeet Salary of product-line manager Insurance on inventories Purchasing department Total fixed expenses 370,800 (164,000) Net operating loss Common costs allocated on the basis of machine-hours tCommon 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' otal general factory overhead or total Purchasing Department expenses Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line? 1 of 6 Next> Prev 3 5 6 8 0