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Thalassines Kataskeves, SA, of Greece makes marine equipment The company has been experiencing losses on its bilge pump product line for several years. The most
Thalassines Kataskeves, SA, 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, SA Income StatementBilge Pump For the Quarter Ended March 31 Sales $460,000 Variable expenses: Variable manufacturing expenses $122000 Sales commissions 41000 Shipping 22,000 Total variable expenses 196,000 Contribution margin 264,000 Fixed expenses: Advertising 22000 DepreCIatIon of eqmpment {no resale 1111000 value] General factory overhead 32,000' Salary of product-line manager 126,000 Insurance on inventories 8,000 Purchasing department 46,0001' Total fixed expenses 350,000 Net operating loss $ (86,000) Required a. Compute the amount of Contribution Margin lost if the bilge pump product line is discontinued. {Enter the lost Contribution Margin as a negative amount.) b. Compute the amount of Fixed Expenses saved if the bilge pump product line is discontinued. {Enter the fixed expenses saved as a positive amount.) Based on your answer from a and b above. compute the increase or decrease of net c. operating income ifthe bilge pump product line is discontinued. {Decreases should be indicated as a negative amount.) b. Compute the amount of Fixed Expenses saved it the bilge pump product line is discontinued. (Enter the fixed expenses saved as a positive amount.) Based on your answer from a and b above. compute the increase or decrease of net c. operating income if the bilge pump productline is discontinued. {Decreases should be indicated as a negative amount.) d. Would you recommend that the bilge pump product line be discontinued? O No (D Yes
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