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 $ 420,000

Variable expenses:

Variable manufacturing expenses $ 137,000

Sales commissions 40,000

Shipping 11,000

Total variable expenses 188,000

Contribution margin 232,000

Fixed expenses:

Advertising (for the bilge pump product line) 22,000

Depreciation of equipment (no resale value) 112,000

General factory overhead 44,000 *

Salary of product-line manager 118,000

Insurance on inventories 8,000

Purchasing department 58,000

Total fixed expenses 362,000

Net operating loss $ (130,000 )

*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 companys total general factory overhead or total Purchasing Department expenses.

Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?