1. 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 StatementBilge Pump

For the Quarter Ended March 31Sales$850,000Variable expenses:Variable manufacturing expenses$330,000Sales commissions42,000Shipping18,000Total variable expenses390,000Contribution margin460,000Fixed expenses:Advertising (for the bilge pump product line)270,000Depreciation of equipment (no resale value)80,000General factory overhead105,000^*Salary of product-line manager32,000Insurance on inventories8,000Purchasing department45,000Total fixed expenses540,000Net operating loss$(80,000)

*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 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?