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: Variable manufacturing expenses $ 450,000 $ 127,000 Sales commissions 48,000 18,000 Shipping Total variable expenses Contribution margin Fixed expenses: Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) 193,000 257,000 26,000 117,000 37,000* General factory overhead Salary of product-line manager 117,000 7,000 Insurance on inventories Purchasing department 54,000t Total fixed expenses 358,000 Net operating loss $(101,000) *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.

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: Variable manufacturing expenses $ 450,000 $ 127,000 Sales commissions 48,000 18,000 Shipping Total variable expenses Contribution margin Fixed expenses: Advertising (for the bilge pump product line) Depreciation of equipment (no resale value) 193,000 257,000 26,000 117,000 37,000* General factory overhead Salary of product-line manager 117,000 7,000 Insurance on inventories Purchasing department 54,000t Total fixed expenses 358,000 Net operating loss $(101,000) *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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 PumpFor the Quarter Ended March 31 Sales $ 470,000 Variable expenses: Variable manufacturing expenses $ 124,000 Sales commissions 41,000 Shipping 19,000 Total variable expenses 184,000 Contribution margin 286,000 Fixed expenses: Advertising (for the bilge pump product line) 23,000 Depreciation of equipment (no resale value) 118,000 General factory overhead 40,000* Salary of product-line manager 125,000 Insurance on inventories 10,000 Purchasing department 44,000† Total fixed expenses 360,000 Net operating loss $ (74,000) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the…
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 PumpFor the Quarter Ended March 31 Sales $ 440,000 Variable expenses: Variable manufacturing expenses $ 122,000 Sales commissions 52,000 Shipping 24,000 Total variable expenses 198,000 Contribution margin 242,000 Fixed expenses: Advertising (for the bilge pump product line) 21,000 Depreciation of equipment (no resale value) 107,000 General factory overhead 46,000* Salary of product-line manager 119,000 Insurance on inventories 7,000 Purchasing department 49,000† Total fixed expenses 349,000 Net operating loss $ (107,000) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the…
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 follows: Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 Sales $ 420,000 Variable expenses: Variable manufacturing expenses $ 122,000 Sales commissions 53,000 Shipping 12,000 Total variable expenses 187,000 Contribution margin 233,000 Fixed expenses: Advertising (for the bilge pump product line) 27,000 Depreciation of equipment (no resale value) 111,000 General factory overhead 48,000* Salary of product-line manager 122,000 Insurance on inventories 14,000 Purchasing department 43,000† Total fixed expenses 365,000 Net operating loss $ (132,000) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the basis of…
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 follows: Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Sales Variable expenses: $ 430,000 Variable manufacturing expenses $ 137,000 Sales commissions 47,000 Shipping 18,000 Total variable expenses 202,000 Contribution margin 228,000 Fixed expenses: Advertising (for the bilge pump product line) 24,000 103,000 49,000* 121,000 13,000 46,000+ 356,000 $ (128,000) 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 would not affect sales of other…
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: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Fixed expenses: $ 480,000 $ 136,000 50,000 16,000 202,000 278,000 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. 27,000 107,000 * 47,000 115,000 10,000 58,000+ 364,000 $ (86,000) Discontinuing the bilge pump product line would…
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: Sales Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Fixed expenses: 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. $ 330,000 42,000 18,000 M 270,000 80,000 105,000* 32,000 8,000 45,000 $ 850,000 390,000 460,000 540,000 $ (80,000) Discontinuing the bilge pump product line would not…
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 follows: Sales Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margini Thalassines Kataskeves, S.A. Income Statement-Bilge Pump For the Quarter Ended March 31 Fixed expenses: 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. $ 130,000 54,000 21,000 22,000 115,000 36,000 120,000 14,000 57,000 $ 440,000 Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump? 205,000…
Pablo Company wishes to determine the fixed portion of its maintenance expenses (a semi-variable expense), as measured against direct labor hours for the first three months of the year. Information for the first quarter is as follows (refer to the attached picture): What is the fixed portion of Pablo Company’s maintenance expense using high-low method? * direct hours labor maintenance costs January 25000 210000 February 30000 240000 march 27000 222000
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: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Fixed expenses: 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. $ 135,000 45,000 11,000 29,000 102,000 38,000* 126,000 15,000 50,000+ $ 430,000 191,000 239,000 360,000 $ (121,000) Discontinuing the bilge pump product line would…
One of ABC product line has been unprofitable for the past 18 months. The latest monthly income statement for the product line is as follows: Sales revenue 19,000 Less: Cost of sales 8,500 Gross profit 10,500 Operating expenses Depreciation 2,750 Insurance 1,400 Manager salary 1,100 Supplies 1,750 Utilities 1,100 Wages 5,000 Total operating expenses 13,100 Profit or loss (2,600) In relation to the operating expenses, utilities, manager salary and $2,000 of the depreciation expense are allocated to this product line. Required: Assume that the sales of other product lines will not be affected by the decision, evaluate whether the unprofitable product line should be disestablished from a financial standpoint.
Last year Minden Company introduced a new product and sold 38,900 units of it at a price of 598 per unit. The product's variable expenses are $68 per unit and its fixed expenses are $839,400 per year. Required: 1. What was this product's net operating income (loss) last year?
Juniper Design Ltd. of Manchester, England, provides design services to residential developers. Last year, the company had net operating income of $430,000 on sales of $1,500,000. The company's average operating assets for the year were $1,700,000 and its minimum required rate of return was 10%. Required: Compute the company's residual income for the year. Residual income < Prev 2 of 13 Next 近