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: $460.000 Thalassines kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses: Variable manufacturing expenses $134.000 Sales commissions 51.000 Shipping 23.000 Total variable expenses 208,000 252,000 Contribution margin Fixed expenses: Advertising Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department 24,000 104.000 36,000* 116.000 5.000 53.0001 Total fixed expenses 338.000 Net operating loss $ (86.000) *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. 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 a. Compute the amount of Contribution Margin lost if the bilge pump product line is discontinued. (Enter the lost Contribution Margin as a negative amount.) Contribution Margin Lost $ 252.000) b. Compute the amount of Fixed Expenses saved if the bilge pump product line is discontinued. (Enter the fixed expenses saved as a positive amount.) Fixed Expenses Saved $ (107.000) Based on your answer from a and b above. compute the increase or decrease of net C. operating income of the bilge pump product line is discontinued. (Decreases should be Indicated as a negative amount.) Change in Net Operating Income if Product Line is Dropped d. Would you recommend that the bilge pump product line be discontinued? Yes No