xercise 9-3 Deciding Whether to Drop or Retain a Segment (LO1 - CC3) malassines Kataskeves, S.A., of Greece, makes marine equipment. The company has been experiencing losses on its b oduct line for several years. The most recent quarterly income statement for the bilge pump product line follows: THALASSINES KATASKEVES, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Less: Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Less: Fixed expenses: Advertising Depreciation of equipment (no resale value) General factory overhead Salary of product-line manager Insurance on inventories Purchasing department expenses Total fixed expenses Net operating loss 950,000 340,000 46,000 14,000 400,000 550,000 290,000 90,000 115,000* 38,000 18,000 65,000+ 616,000 (66,000) Common costs allocated on the basis of machine-hours. Common costs allocated on the basis of sales dollars. he currency in Greece is the euro, denoted by . The discontinuance of the bilge pump product line would not affect s roduct lines and would have no noticeable effect on the company's total general factory overhead or total purchasing xpenses.