Exercise 10-15 Dropping or Retaining a Segment [LO10-2] 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 Sales Variable expenses: $490,000 Variable manufacturing expenses Sales commissions Shipping $128,000 45,000 13,000 Total variable expenses 186,000 304,000 Contribution margin Fixed expenses. 21,000 Advertising Depreciation of equipment (no resale value General factory overhead Salary of product-line manager Insurance on inventories Purchasing department 101,000 42,000* 123,000 11,000 59,000t Total fixed expenses 357,000 Net operating loss (53,000) 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