Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribed

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 income statement for the bilge pump product line follows: 950,000 340,000 46,000 14,000 THALASSINES KATASKEVES, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 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 product-line manager Insurance on inventories Purchasing department expenses Total fixed expenses Net operating loss 400,000 550,000 290,000 90,000 115,000 38,000 18,000 65,000+ 616,000 (66,000) Common costs allocated on the basis of machine-hours. +- Common costs allocated on the basis of sales dollars. The currency in Greece is the euro, denoted by . The discontinuance of the bilge pump product line would not affect sales of other product lines and would have no noticeable effect on the company's total general factory overhead or total purchasing department expenses. Required: Compute the net advantage or disadvantage if the bilge pump product line be discontinued? (Negative amount should be indicated by a minus sign.) Net advantage (disadvantage) of dropping the line Should the bilge pump product line be discontinued? O Yes O No

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

Step: 3

blur-text-image

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

An Environmental Audit Primer Student Guide

Authors: Velsoft Training Materials, Inc.

1st Edition

1774550393, 978-1774550397

More Books

Students also viewed these Accounting questions

Question

Language in Context?

Answered: 1 week ago