Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Complete Guide Practical Tools For Self Assessment

Authors: Gerardus Blokdyk

1st Edition

0655424571, 978-0655424574

More Books

Students also viewed these Accounting questions

Question

a. Describe the encounter. What made it intercultural?

Answered: 1 week ago