Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pu

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answerhappygod
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Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pu

Post by answerhappygod »

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:
*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?
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