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11 Homework Saved The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and

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11 Homework Saved The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes $ 925,000 $269,000 $ 404,000 $ 252,000 483,000 115,000 208,000 160,000 442,000 154,000 196,000 92,000 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) 70.100 8.900 40,600 20,600 42,700 20,3007 , 300 15,100 114,700 40,800 38,000 35,900 185,000 53,800 80, 800 50,400 412,500 123,800 166,700 122,000 $ 29,500 $ 30,200 $ 29,300 $(30,000) "Allocated on the basis of sales dollars, 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 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? mework Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 114,700 40,800 38,000 185,000 53,800 80,800 412,500 123,800 166,700 $ 29,500 $ 30,200 $ 29,300 35,900 50,400 122,000 $ (30,000) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as the line should be discontinued. The special equipment used to produce racing bikes has no resale value and doe 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 asses profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Required 2 > Homework Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 114,700 185,000 412,500 $ 29,500 40,800 38,000 53,80080,800 123,800 166,700 $ 30,200 $ 29,300 35,900 50,400 122,000 $(30,000) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommend the line should be discontinued. The special equipment used to produce racing bikes has no resale value a 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 profitability of the various product lines. Complete this question by entering your answers in the tabs Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No 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 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) | Net operating income (loss) $

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