Homework #10 2 Sams Help Save & Ext Exercise 13-15 (Algo) Dropping or Retaining a Segment [LO13-2) 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 06 points Thalassines Kataskeves, S.A. Incone Statement-Bilge P Sales Variable expenses For the Quarter Ended March 31 Variable manufacturing expenses $127,000 Book Sales commissions Shipping 45, 16,000 Total variable expenses 392,000 Contribution margin 265,000 Fixed expenses: References 30,000 184,000 32,000* 121,000 14,000 43,000 344,008 $176,0) Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) General factory overhead 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?