Thalassines Kataskeves, S.A, of Greece makes marine equipment. The company has b

Question

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 Incone Statement-Bilge Pump the Quarter Ended March3 Sales Variable expenses: s 410,00e Variable manufacturing expenses Sales commissions Shipping s 121,00e 51,000 22,869 544 Total variable expenses Contribution margin Fixed expenses: 194,009 :16,000 Advertising (for the bilge pusp product line) 25,000 105,000 45,000 125,000 9,000 52,000 Depreciation of equipment (no resale value) General factory overhead Salary of product-1ine nanager Insurance on inventorles Purchasing department Total fixed expenses Net operating loss 361.000 s (145,000) 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 discontinuling the bilge pump product line?

Explanation / Answer

Solution:-

Explanation:-

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Desadvantage or net operating loss $ 57,000

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