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 kataskuves, 5.A. Income Statement-Bilge Pump For the Quarter Ended Manch 31 Sales $410,000 Vorible expenses Variable manufacturing expenses $ 134,000 Sales commissions 43,000 Shipping 10,000 Total variable expenses 152,000 Contribution margin 253, Fixed expenses Advertising for the bil pump product line) 26,000 Depreciation of equipment (no resale value) 118,000 General factory overhead 10,000 Salary of product line mange 112,000 Insurance on Inventories 13.00 Purchasing department 42.000 Total fixed expenses Met operating loss (90,000) Common costs allocated on the basis of machine hours Common costs allocated on the basis of sales collars Discontinuing the brige pump product line would not affect sales of other product lines and would have no effect on the company's total general factory overhead on total Purchasing Department expenses Required: What is the financial advantage disadvantage of discontinuing the billige pump product too

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

Students also viewed these Accounting questions