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Les Objets Volants ( LOJ ) , S . A . , of France, makes aircraft equipment. The company has been experiencing losses on its
Les Objets Volants LOJ SA of France, makes aircraft equipment. The company has been experiencing losses on its fuel pump product line for several years. The most recent quarterly income statement for the fuel pump product line follows: LES OBJETS VOLANTS SA Income StatementFuel Pump For the Quarter Ended March Sales Less: Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Less: Fixed expenses: Advertising Depreciation of equipment no resale value General factory overhead Salary of productline manager Insurance on inventories Purchasing department expenses Total fixed expenses Net operating loss Common costs allocated on the basis of machinehours. Common costs allocated on the basis of sales dollars. The currency in France is the euro, denoted by Discontinuing the fuel pump product line would not affect sales of other product lines and would have no noticeable effect on the companys total general factory overhead or total purchasing department expenses. Required: Compute the net advantage or disadvantage if the fuel pump product line be discontinued? Negative amount should be indicated by a minus sign.
Les Objets Volants LOJ SA of France, makes aircraft equipment. The company has been experiencing losses on its fuel pump product line for several years. The most recent quarterly income statement for the fuel pump product line follows:
LES OBJETS VOLANTS SA
Income StatementFuel Pump
For the Quarter Ended March
Sales
Less: Variable expenses:
Variable manufacturing expenses
Sales commissions
Shipping
Total variable expenses
Contribution margin
Less: Fixed expenses:
Advertising
Depreciation of equipment no resale value
General factory overhead
Salary of productline manager
Insurance on inventories
Purchasing department expenses
Total fixed expenses
Net operating loss
Common costs allocated on the basis of machinehours.
Common costs allocated on the basis of sales dollars.
The currency in France is the euro, denoted by Discontinuing the fuel pump product line would not affect sales of other product lines and would have no noticeable effect on the companys total general factory overhead or total purchasing department expenses.
Required:
Compute the net advantage or disadvantage if the fuel pump product line be discontinued? Negative amount should be indicated by a minus sign.
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