Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
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 finded March 31 Sales $ 420,000 Variable expenses Variable manufacturing expenses $ 127,000 Sales commissions 45,000 Shipping 22,000 Total variable expenses 194,000 Contribution margin 226,000 Pixed expenses Advertising for the bilge pump product line) 21,000 Depreciation of equipment no resale value) 102,000 General factory overhead 49.000 Salary of product-line manager 115,000 Insurance on inventories 13,000 Purchasing department 51,000+ Total fixed expenses 351,000 Het operating loss $(125,000) "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 bilge pump product line? Required: What is the financial advantage (disadvantage) of discontinuir Financial advantage Financial (disadvantage)

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

Step: 3

blur-text-image

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

A Textbook Of Cost And Management Accounting

Authors: M N Arora

11th Edition

9390470501, 978-9390470501

More Books

Students also viewed these Accounting questions