$ 930,000 $267.000 $ 404,000 $ 259,000 456,000 110,000 191,000 155,000 474,000 157,000 213,000 104,000 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) 70,300 8,600 40,800 20,900 44,500 20,900 7,700 15,900 114,100 40,100 38,900 35, 100 186,000 53, 400 80,800 51,800 414,900 123,000 168,200 123,700 $ 59,100 $ 34,000 S 44,800 $(19,700) "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 the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does no 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 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? Financial (disadvantage) per quarter $ 930,000 $267.000 $ 404,000 $ 259,000 456,000 110,000 191,000 155,000 474,000 157,000 213,000 104,000 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) 70,300 8,600 40,800 20,900 44,500 20,900 7,700 15,900 114,100 40,100 38,900 35, 100 186,000 53, 400 80,800 51,800 414,900 123,000 168,200 123,700 $ 59,100 $ 34,000 S 44,800 $(19,700) "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 the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does no 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 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? Financial (disadvantage) per quarter
