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: Sales Variable expenses variable manufacturing expenses Sales comissions Shipping Total variable expenses Contribution margin Thalassines Ketaskeves, S.A. Income Statement-611ge Pump be the Quarter Ended March 31 Fixed expenses Advertising (for the bilge pump product Itne) Depreciation of equipment (no resale value) General factory overhead Salary of product line manager Insurance on Inventories Purchasing department Tutal fled expances Net operating loss "Common costs allocated on the basis of machine-hours 1Common costs allocated on the basis of sales dollars $ 126,000 45,000 24,000 24,000 112,000 40,000 115,000 1,000 44,000 $ 500,000 195,000 105,000 341,000 Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company's attnat Purchasma Panartment mennes total neneral tarton
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: Sales Variable expenses variable manufacturing expenses Sales comissions Shipping Total variable expenses Contribution margin Thalassines Ketaskeves, S.A. Income Statement-611ge Pump be the Quarter Ended March 31 Fixed expenses Advertising (for the bilge pump product Itne) Depreciation of equipment (no resale value) General factory overhead Salary of product line manager Insurance on Inventories Purchasing department Tutal fled expances Net operating loss "Common costs allocated on the basis of machine-hours 1Common costs allocated on the basis of sales dollars $ 126,000 45,000 24,000 24,000 112,000 40,000 115,000 1,000 44,000 $ 500,000 195,000 105,000 341,000 Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company's attnat Purchasma Panartment mennes total neneral tarton
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
11.
Subject:- Accounting
Transcribed Image Text:Thalassines Kataskeves, SA, 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:
Sales
Variable expenses
Variable manufacturing expenses
Sales comissions
Shipping
Total variable expenses
Contribution margin
Thalassines Kataskeves, S.A.
Income Statement-611ge Pump
For the Quarter Ended, March 31
Fived expenses:
Advertising (for the hilge pump product line)
Depreciation of equipment (no resale value)
General factory overhead
Salary of product line manager
Insurance on Inventories
Purchasing department
Tural fixed aupances
$ 126,000
45,000
24,000
24,000
112,000
40,000
115,000
44,000
$500,000
195,000
105,000
343,000
$ (37,000)
"Common costs allocated on the basis of machine-hours
1Common 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
Transcribed Image Text:*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?
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