Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pumpproduct line for several years. The most recent quarterly contribution format income statement for the bilge pump follows:Thalassines Kataskeves, S.A.Income Statement-Bilge PumpFor the Quarter Ended March 31SalesVariable expenses:$ 430,000Variable manufacturing expenses$ 137,000Sales commissions47,000Shipping18,000Total variable expenses202,000Contribution margin228,000Fixed expenses:Advertising (for the bilge pump product line)24,000103,00049,000*121,00013,00046,000+356,000$ (128,000)Depreciation of equipment (no resale value)General factory overheadSalary of product-line managerInsurance on inventoriesPurchasing departmentTotal fixed expensesNet operating loss*Common costs allocated on the basis of machine-hours.†Common costs allocated on the basis of sales dollars.Discontinuing the bilge pump would not affect sales of other product lines and would have no effect on the company's total generalfactory overhead or total Purchasing Department expenses.Required:What is the financial advantage (disadvantage) of discontinuing the bilge pump?

Total avoidable fixed costs = Advertising + Salary of product line manager + Insurance on…

Answered: Thalassines Kataskeves, S.A., of Greece…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencinglosses on its bilge pump product line for several years. The most recent quarterly contribution formatincome statement for the bilge pump product line follows:Thalassines Kataskeves, S.A.Income Statement—Bilge PumpFor the Quarter Ended March 31Sales ................................................................................................. €850,000Variable expenses:Variable manufacturing expenses ................................................. €330,000Sales commissions ....................................................................... 42,000Shipping ........................................................................................ 18,000Total variable expenses .................................................................... 390,000Contribution margin .......................................................................... 460,000Fixed expenses:Advertising…
1
Questions (d) and (e) are based on the information below. Sanit Ltd is an alcohol sanitizer manufacturing company that produced 175 000 units of 100 ml hand sanitizer bottles during the financial year ended 31 August 2020. The normal capacity is 100 000 units of hand sanitizer 100 ml bottles per year. The total cost per unit, excluding fixed production overheads, amounts to R50 per unit. The fixed production overheads incurred amounts to R700 000 for the year. The closing balance of finished goods is 5 000 units. Assume there is no opening balance. (d) The under / over recovered fixed production overheads that is recognised as an expense (cost of sales) according to IAS 2, Inventories, amounts to: 1) R525 000 over recovery 2) R525 000 under recovery 3) R700 000 over recovery 4) R0 (e) Calculate the cost of sales in the statement of profit or loss and other comprehensive income for the financial year end 31 August 2020 of Sanit Ltd: 1) R9 000 000 2) R9 180 000…
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs (1) $155,800 $190,300 $203,900 Insurance expense (2) 1,080 1,080 1,080 Depreciation expense 2,110 2,110 2,110 Property tax expense (3) 540 540 540 (1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.(2) Insurance expense is $1,080 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).(3) Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are a.$38,950 b.$181,675 c.$220,625 d.$142,725
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Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: June $201,000 Manufacturing costs" Insurance expense** April May $157,200 $197,600 970 970 2,200 420 2,200 420 970 Depreciation expense Property tax expense*** "Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $970 a month; however, the insurance is paid four times yearly in the first month of the quarter, (.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are O&$187.500 b. $39,300 Oe5148,200 Od $226,800 2,200 420
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $156,300 $192,700 $213,400 Insurance expense*: 970 970 970 Depreciation expense 1,820 1,820 1,820 Property tax expense*** 540 540 540 Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $970 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are a. $120,135 b. $117,225 c. $138,218 d. $156,300
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $156,800 $195,200 $217,600 Insurance expense** 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense*** 500 500 500 *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October).***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are Group of answer choices $120,600 $123,100 $121,100 $122,600
1.
1. Prepare the company's contribution margin income statement for the month of April. Round all figures to the nearest dollar. 2. Assume that passenger volume increases by 12% in May. Which figures on the income statement would you expect to change, and by what percentage would they change? Which figures would remain the same as in April?
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