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

See similar textbooks

Similar questions

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 PumpFor the Quarter Ended March 31 Sales $ 470,000 Variable expenses: Variable manufacturing expenses $ 124,000 Sales commissions 41,000 Shipping 19,000 Total variable expenses 184,000 Contribution margin 286,000 Fixed expenses: Advertising (for the bilge pump product line) 23,000 Depreciation of equipment (no resale value) 118,000 General factory overhead 40,000* Salary of product-line manager 125,000 Insurance on inventories 10,000 Purchasing department 44,000† Total fixed expenses 360,000 Net operating loss $ (74,000) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the…
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 PumpFor the Quarter Ended March 31 Sales $ 440,000 Variable expenses: Variable manufacturing expenses $ 122,000 Sales commissions 52,000 Shipping 24,000 Total variable expenses 198,000 Contribution margin 242,000 Fixed expenses: Advertising (for the bilge pump product line) 21,000 Depreciation of equipment (no resale value) 107,000 General factory overhead 46,000* Salary of product-line manager 119,000 Insurance on inventories 7,000 Purchasing department 49,000† Total fixed expenses 349,000 Net operating loss $ (107,000) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the…
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 follows: Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 Sales $ 420,000 Variable expenses: Variable manufacturing expenses $ 122,000 Sales commissions 53,000 Shipping 12,000 Total variable expenses 187,000 Contribution margin 233,000 Fixed expenses: Advertising (for the bilge pump product line) 27,000 Depreciation of equipment (no resale value) 111,000 General factory overhead 48,000* Salary of product-line manager 122,000 Insurance on inventories 14,000 Purchasing department 43,000† Total fixed expenses 365,000 Net operating loss $ (132,000) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the basis of…
Mahendra
am.600.
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…
None
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…
Current Attempt in Progress The final amounts were in for Bramble Corp's fixed-MOH costs. The total fixed-MOH costs consisted of $2,500 of insurance (all prepaid), $4,500 in accrued supervisor salaries, $4,600 of factory-related depreciation, and $1,600 in property taxes (paid in cash). Bramble's applied fixed-MOH costs amounted to $14,000 for the year. Further, both fixed-MOH variances were favorable, the price variance being $200 and the volume variance being $600. Record the following journal entries: (1) to recognize the actual fixed-MOH costs incurred, (2) the allocation of fixed-MOH to production, and (3) the final recognition of specific fixed-MOH variances (while closing out the control account). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) No. Account Titles and Explanation (1) (2) (3)…
In July, Meers Corporation sold 3,200 units of its only product. Its total sales were $108,800, its total variable expenses were $51,200, and its total fixed expenses were $35,300. Required: a. Construct the company's contribution format income statement for July. b. Redo the company's contribution format income statement assuming that the company sells 3,650 units. Complete this question by entering your answers in the tabs below. Required a Required b Construct the company's contribution format income statement for July. Note: Do not round intermediate calculations. 0 $ 0
The Harding Company manufactures skates. The company’s income statement for 20X1 is as follows: HARDING COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (10,400 skates @ $58 each) $ 603,200 Variable costs (10,400 skates at $24) 249,600 Fixed costs 190,000 Earnings before interest and taxes (EBIT) $ 163,600 Interest expense 62,000 Earnings before taxes (EBT) $ 101,600 Income tax expense (20%) 20,320 Earnings after taxes (EAT) $ 81,280 a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) b. Compute the degree of financial leverage. (Round your answer to 2 decimal places.) c. Compute the degree of combined leverage. (Round your answer to 2 decimal places.) d. Compute the break-even point in units (number of skates). (Round your answer to the nearest whole number.)
Pares

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS