1 Exercise 13-15 (Algo) Dropping or Retaining a Segment (LO13-2] Thalassines Kataskeves, SA, of Greece makes...

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1 Exercise 13-15 (Algo) Dropping or Retaining a Segment (LO13-2] 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 Thalassines Kataskeves, 5.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses $440,000 Sales commissions Variable manufacturing expenses $138,000 44,000 Shipping 23,000 Total variable expenses:" Contribution margin 203,000 237,000 Fixed expenses: 27,000 113,000 34,000 117,000 9,000 47,000 347,000 $(110,000) Advertising (for the bilge pump product Line) Depreciation of equipment (no resale value) General factory everhead Salary of product-Line manager Insurance on Inventories Purchasing department Total fixed expenses Net operating loss "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? 1 Exercise 13-15 (Algo) Dropping or Retaining a Segment (LO13-2] 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 Thalassines Kataskeves, 5.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses $440,000 Sales commissions Variable manufacturing expenses $138,000 44,000 Shipping 23,000 Total variable expenses:" Contribution margin 203,000 237,000 Fixed expenses: 27,000 113,000 34,000 117,000 9,000 47,000 347,000 $(110,000) Advertising (for the bilge pump product Line) Depreciation of equipment (no resale value) General factory everhead Salary of product-Line manager Insurance on Inventories Purchasing department Total fixed expenses Net operating loss "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?