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Thalassines Kataskeves, S.A. Income StatementBilge Pump For the Quarter Ended March 31 Sales $ 410,000 Variable expenses: Variable manufacturing expenses $ 132,000 Sales commissions 53,000

Thalassines Kataskeves, S.A. Income StatementBilge Pump For the Quarter Ended March 31
Sales $ 410,000
Variable expenses:
Variable manufacturing expenses $ 132,000
Sales commissions 53,000
Shipping 16,000
Total variable expenses 201,000
Contribution margin 209,000
Fixed expenses:
Advertising (for the bilge pump product line) 23,000
Depreciation of equipment (no resale value) 104,000
General factory overhead 39,000*
Salary of product-line manager 121,000
Insurance on inventories 9,000
Purchasing department 52,000
Total fixed expenses 348,000
Net operating loss $ (139,000)

*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 companys total general factory overhead or total Purchasing Department expenses.

Required:

What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

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