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: $ 470,000 $ 131,000 55,000 16,000 Thalassinos kataskeves, S.A. Income Statement-Bilg6 Pump For the Quarter Ended March 31 Sales Variable expenses Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Fixed expenses Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department Total Eixed expenses Net operating loss 202,000 268,000 25,000 110,000 32,000 121,000 10,000 44,000+ 342,000 $ (74,000) *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 foctory overhead or total Purchasing Department expenses. Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line? Financial (disadvantago)

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

Accounting At War The Politics Of Military Finance

Authors: Warwick Funnell, Michele Chwastiak

1st Edition

1138616737, 9781138616738

More Books

Students also viewed these Accounting questions