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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
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
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