Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thalassines kataskeves, SA 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
image text in transcribed
Thalassines kataskeves, SA 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 follow $430,000 43 $ 133,000 54,900 15,000 202,000 228,000 Thalassines kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses Variable manufacturing expenses Sales comissions 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 fixed expenses Net operating loss *Common costs allocated on the basis of machine-hours Common costs allocated on the basis of sales dollars 23,600 105, 44,000 117,000 11,000 44,00 344,000 $ (116,000) 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: 23.000 195.000 20 11,000 344.000 278,00 Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager 44.ee Insurance on inventories 117,000 Purchasing department 14.000 Total fixed expenses Net operating loss 5 (116.000) "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

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_2

Step: 3

blur-text-image_3

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

Financial Accounting A Decision Making Approach

Authors: Thomas E. King, Valdean C. Lembke, John H. Smith

2nd Edition

0471328235, 978-0471328230

More Books

Students also viewed these Accounting questions

Question

What is cultural awareness?

Answered: 1 week ago

Question

4. Explain how to price managerial and professional jobs.pg 87

Answered: 1 week ago