Thalassines kataskeves, S.A. of Greece makes marine equipment. The company has been experiencing losses on its bilge pumo product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows. Help Save & Si 12 2 points 8 0101:31 Thalassines kataskeves, S.A. Income Statement-slige Pump Sales For the Quarter Ended March 31 Variable expenses: $ 480,000 Variable manufacturing expenses Sales comissions $ 121,000 Shipping 44,000 Total variable expenses 10,000 Contribution margin 175.000 305,000 Fixed expenses Advertising (for the bilge pump product line) 24,000 Depreciation of equipment (no resale value) 101,000 General factory overhead 39,000 Salary of product line manager 126,000 Insurance on inventories Purchasing department Total fixed expenses 337,000 5 (37,000) Niet operating loss *Common costs allocated on the basis of machine-hours. tCommon 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 billige pump product line? 5,000 42,000 MC Help Save & Exi 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 Variable expenses: $ 480,000 Variable manufacturing expenses Sales comissions $ 121,000 44,000 Shipping Total variable expenses 10,000 Contribution margin 175,000 305,000 Fixed expenses Advertising (for the bilge pump product line) 24,000 Depreciation of equipment (no resale volue) 101,000 General factory overhead 39,000 Salary of product-line manager 126,000 Insurance on inventories 5,000 Purchasing department 42,000 337,000 Total fixed expenses $ (32,000) Net operating loss *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? Next >