Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on...
70.2K
Verified Solution
Link Copied!
Question
Accounting
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 Pump For the Quarter Ended March 31 nts Sales Variable expenses: $480,900 Variable manufacturing expenses Sales commissions Shipping $120,000 43,000 17,000 eBook Total variable expenses Contribution margin 180,006e 300,800 Print Fixed expenses: Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) 27,880 109,000 45,000 119,000 6,000 46, 000 General factory overhead Salary of product-line manager Insurance on inventories Purchasing department Total fixed expenses Net operating loss 352,008 $(52,e00) Common costs allocated on the basis of machine-hours. tCommon 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
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!