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 $450,000variable expenses: variable manufacturing expenses $128,000 sales commissions 54,000 shipping 15,000 total variable expenses 197,000contribution margin 253,000fixed expenses: advertising 23,000 depreciation of equipment (no resale value) 112,000 general factory overhead 49,000* salary of product-line manager 118,000 insurance on inventories 6,000 purchasing department 40,000 total fixed expenses 348,000net operating loss $(95,000)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: a. compute the increase or decrease of net operating income, if the product line is continued or discontinued. (decreases should be indicated by a minus sign.)b. would you recommend that the bilge pump product line be discontinued? noyes

Do it! review 16-3 the assembly department for right pens has the following production data for the current month. beginning work in process units transferred out ending work in process 0 22,500 16,000 materials are entered at the beginning of the process. the ending work in process units are 70% complete as to conversion costs. compute the equivalent units of production for (a) materials and (b) conversion costs. materials conversion costs the equivalent units of production

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar. spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements. cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery. rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer. gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life. esquire company provides financial statements to external users every three years.

Vortex company operates a retail store with two departments. information about those departments follows. department a department b sales $ 800,000 $ 450,000 cost of goods sold 497,000 291,000 direct expenses salaries 125,000 88,000 insurance 20,000 10,000 utilities 24,000 14,000 depreciation 21,000 12,000 maintenance 7,000 5,000 the company also incurred the following indirect costs. salaries $36,000 insurance 6,000 depreciation 15,000 office expenses 50,000 indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. additional information about the departments follows. department square footage number of employees a 28,000 75 b 12,000 50 required: 1. determine the departmental contribution to overhead and the departmental net income for department a and department b.