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Contribution margin Fixed expenses: 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 (indirect) costs allocated on the basis of machine-hours. tCommon (indirect) costs allocated on the basis of sales dollars. 22,000 112,000 Answer is complete but not entirely correct. $ (85,000) 45,000* Financial (disadvantage) 121,000 6,000 48,00et 261,000 Discontinuing the bilge pump product line would not affect sales of other product lines and would have no ef total general factory overhead or total Purchasing Department expenses. 346,000 $ (85,000) Required: What is the total financial impact of discontinuing the bilge pump product line? (Indicate a negative impact wit See Example 11-2a in the course packet for guidance.)

Contribution margin Fixed expenses: 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 (indirect) costs allocated on the basis of machine-hours. tCommon (indirect) costs allocated on the basis of sales dollars. 22,000 112,000 Answer is complete but not entirely correct. $ (85,000) 45,000* Financial (disadvantage) 121,000 6,000 48,00et 261,000 Discontinuing the bilge pump product line would not affect sales of other product lines and would have no ef total general factory overhead or total Purchasing Department expenses. 346,000 $ (85,000) Required: What is the total financial impact of discontinuing the bilge pump product line? (Indicate a negative impact wit See Example 11-2a in the course packet for guidance.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Contribution margin Fixed expenses: 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 (indirect) costs allocated on the basis of machine-hours. +Common (indirect) costs allocated on the basis of sales dollars. 22,000 112,000 Answer is complete but not entirely correct. $ (85,000) 45,000* Financial (disadvantage) 121,000 6,000 48,00et 261,000 Discontinuing the bilge pump product line would not affect sales of other product lines and would have no ef total general factory overhead or total Purchasing Department expenses. 346,000 $ (85,000) Required: What is the total financial impact of discontinuing the bilge pump product line? (Indicate a negative impact wi See Example 11-2a in the course packet for guidance.)
Transcribed Image Text:Contribution margin Fixed expenses: 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 (indirect) costs allocated on the basis of machine-hours. +Common (indirect) costs allocated on the basis of sales dollars. 22,000 112,000 Answer is complete but not entirely correct. $ (85,000) 45,000* Financial (disadvantage) 121,000 6,000 48,00et 261,000 Discontinuing the bilge pump product line would not affect sales of other product lines and would have no ef total general factory overhead or total Purchasing Department expenses. 346,000 $ (85,000) Required: What is the total financial impact of discontinuing the bilge pump product line? (Indicate a negative impact wi See Example 11-2a in the course packet for guidance.)
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