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Please answer will thumbs up Thalassines Kataskeves, S.A, of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line
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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: $ 440,000 $130,000 Variable manufacturing expenses Sales commissions Shipping 49,000 18,000 0 197,000 Total variable expenses Contribution margin Fixed expenses: 243, 000 Advertising (for the bilge pump product line) Depreciation of equipment (no resale 119,000 21,000 value) General factory overhead Salary of product-line manager Insurance on inventories 49,000 124,000 12,000 47,000 Purchasing department 372,000 (129,000 Total fixed expenses Net operating loss 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 salies 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? Prev 28 of Step by Step Solution
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