Exercise 13-15 (Algo) Dropping or Retaining a Segment [LO13-2] 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 pump product line follows: Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses: $430,000 Variable manufacturing expenses $ 130,000 Sales commissions 52,000 Shipping 24,000 Total variable expenses Contribution margin 206,000 224,000 Fixed expenses: 24,000 116,000 41,000* 115,000 14,000 56,0001 366,000 $ (142,000) 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. 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?