points 1 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: elook Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Variable manufacturing expenses Heferences Sales Variable expenses: Sales commissions Shipping Contribution margin Total variable expenses Fleed expenses: 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. $ 500,000 $ 129,000 55,000 24,000 208,000 292,000 27,000 106,000 40,000 130,000 14,000 45,000 362,000 $ (70,000) 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. 1 nts eBook Beferences General factory overhead Pers Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) 27,000 106,000 40,000 130,000 14,000 45,000 362,000 $ (70,000) 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? T pum 3 ock Exercise 13-4 (Algo) Special Order Decision [LO13-4] Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company's accounting system says that the unit product cost for this bracelet is $266.00 as shown below. Direct materials Direct labor $150 Manufacturing overhead Here Unit product cost 33 $266 The members of a wedding party have approached Imperial Jewelers about buying 25 of these gold bracelets for the discounted price of $364.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $455 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. 3 povits YDOOR H References The members of a wedding party have approached Imperial Jewelers about buying 25 of these gold bracelets for the discounted price of $364.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $455 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Required 1 Required 2 >