Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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: $ 490,000 Variable manufacturing expenses $ 139,000 Sales commissions 46,000 Shipping 12,000 Total variable expenses Contribution margin 197,000 293,000 Fixed expenses: 29,000 101,000 35,000* 126,000 14,000 42,000t 347,000 $ (54,000) 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. 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? 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: $ 490,000 Variable manufacturing expenses $ 139,000 Sales commissions 46,000 Shipping 12,000 Total variable expenses Contribution margin 197,000 293,000 Fixed expenses: 29,000 101,000 35,000* 126,000 14,000 42,000t 347,000 $ (54,000) 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. 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?
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
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...
-
Suppose we took a random sample of 100 College students individuals, organized by gender and whether they are right- or left-handed. Females Right -handed 44 left-handed. Males Right-handed 43...
-
You are planning production for a finished good. One of the raw materials in production is sourced from preferred VendorA. VendorA is not equipped to handle large orders and sources the raw materials...
-
WiCom Servicing completed these transactions during November 2020, its first month of operations: Required 1. Prepare journal entries to record the transactions. Use general journal page 1. 2. Set up...
-
Drilling decisions by oil and gas operators involve intensive capital expenditures made in an environment characterized by limited information and high risk. A well site is dry, wet, or gushing....
-
At one time, a common means of forming small quantities of oxygen gas in the laboratory was to heat KClO3: For this reaction, calculate ÎH for the formation of (a) 1.36 mol of O2 (b) 10.4 g of...
-
Suppose a tour guide approached the general manager of The Agawa Canyon Railway with a proposal to offer a special guided tour to the agents clients. The tour would occur 20 times each summer and be...
-
Cranberry Wood Products Inc. spends an average of $9.50 in labor and $12.40 in materials on every unit it sells. Sales commissions and shipping amount to another $3.10. All other costs are fixed and...
-
A population of N = 5 scores has a variance of o = 24. If the scores were from a sample, what value would be obtained for the sample variance? s = 14 s = 16 s=20
-
Professor Mondragon believes that it is often too quiet during exams, and this can lead students to perform worse. To test this, she has one of her classes take the exam in silence and one of her...
-
Mass, m = 4 kg Radius of gyration, k = 190 mm Length OG = 0.5 m 60 0 M = 20 Nm G 0.5 m = The pendulum shown has a mass of m = 4 kg and radius of gyration KG 190 mm as shown in the figure. A couple...
-
Based on the principles in the Job Characteristics Model, give an example and make five recommendations that could help the Hotel Front Office Leadership Team improve motivation levels and employee...
-
How do you increase the use of the standard principles provided by the Institute of Medicine given the inequities experienced in the healthcare system continuum?
-
Use a t-distribution to find a confidence interval for the difference in means d = - using the relevant sample results from paired data. Assume the results come from random samples from populations...
-
Act3.1 Does it matter whether it is within the scope of your individual responsibility, if you are able to negotiate a good deal on costs with a supplier? Explain.( Do you think you are allowed to...
-
Anna Abraham is the accounts payable clerk for Jiffy Delivery Service. This company runs 10 branches in the San Diego area. The company pays for a variety of expenses. Anna writes the checks for each...
-
A genetically engineered strain of Escherichia coli (E. coli) is used to synthesize human insulin for people suffering from type I diabetes mellitus. In the following simplified reaction scheme,...
-
International Hotels operates many hotels throughout the world. One of its hotels is facing difficult times because several new competing hotels are opening. To accommodate its flight personnel, Air...
-
Logan Furniture Company manufactures living room furniture through two departments: Framing and Upholstering. Materials are entered at the beginning of each process. For May, the following cost data...
-
Tim Hortons purchases and roasts highquality whole bean coffees and sells them, along with other coffee-related products, primarily through its company-operated retail stores. The company is known...
Study smarter with the SolutionInn App