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 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 contribution format income statement for the bilge pump product line follows: Thalassines Kataskeves, S.A Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses: $420,000 Variable manufacturing expenses Sales Comm1551ons Shipping $134,000 46,000 22,000 Total variable expenses Contribution margin Fixed expenses: 202,000 218,000 Advertising (for the bilge pump product line) 27,000 109,000 43,000 112,000 14,000 46,000t Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department Total fixed expenses 351,000 Net operating loss $ (133,000) *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 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

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

Construction Guide Accounting And Knowledge Based Audits

Authors: CPA Eric P. Wallace

1st Edition

0808020870, 978-0808020875

More Books

Students also viewed these Accounting questions