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

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:

image text in transcribed

image text in transcribed

Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 $480,000 Sales Variable expenses Variable manufacturing expenses Sales commissions Shipping $137,000 41,000 19,000 Total variable expenses 197,000 283,000 Contribution margin Fixed expenses Advertising Depreciation of equipment (no resale 21,000 110,000 value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department 43,000* 128,000 12,000 52,000t Total fixed expenses 366,000 Net operating loss $ (83,000) 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 sales of other product lines and would have no effect on the company's total general factory overhead or total Purchasing Department expenses Required a. Compute the increase or decrease of net operating income if the product line is continued or discontinued. (Decreases should be indicated by a minus sign.)

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

HRD Audit Evaluating The Human Resource Function For Business Improvement

Authors: RAO

1st Edition

0761993509, 978-0761993506

More Books

Students also viewed these Accounting questions

Question

How is the NDAA used to shape defense policies indirectly?

Answered: 1 week ago

Question

7. Identify four antecedents that influence intercultural contact.

Answered: 1 week ago

Question

5. Describe the relationship between history and identity.

Answered: 1 week ago