Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment...
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Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $ 266,000 Mountain Bikes $ 404,000 Racing Bikes $ 251,000 486,000 118,000 208,000 160,000 435,000 148,000 196,000 91,000 69,000 8,200 40,300 20,500 43,700 20,300 7,900 15,500 115,000 40,900 38,800 35,300 184,200 53,200 80,800 50,200 411,900 122,600 167,800 121,500 $ 23,100 $ 25,400 $ 28,200 $ (30,500) ht ences Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $ 266,000 Mountain Bikes $ 404,000 Racing Bikes $ 251,000 486,000 118,000 208,000 160,000 435,000 148,000 196,000 91,000 69,000 8,200 40,300 20,500 43,700 20,300 7,900 15,500 115,000 40,900 38,800 35,300 184,200 53,200 80,800 50,200 411,900 122,600 167,800 121,500 $ 23,100 $ 25,400 $ 28,200 $ (30,500) ht ences Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0
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Answer rating: 100% (QA)
Required 1 Financial AdvantageDisadvantage of Discontinuing Racing Bikes Financial Advantage Elimination of racing bike losses Discontinuing the racing bike line would eliminate the 30500 quarterly lo... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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