CH6AsgnHelp

Mount a i n Total Dirt Bikes Bil-(es Racing Bil-(es Sales $ 926,666 a; 266,066 5 406,666 $ 254,066 Variable manufacturing and selling expenses 45?,666 110,066 195,666 152,066 Contribution margin 469,666 156,066 211,666 162,066 Fixed expenses: Advertising, traceable 69,866 8,866 40,?66 20,366 Depreciation of special equipment 43,766 20,366 ?,266 15,766 Salaries o'F productline managers 115,366 40,566 38,566 36,266 Allocated comon 'Fixed expenses" 185,266 53,266 81,266 50,866 Total fixed expenses 414,666 123,366 167,766 123,066 Net operating income (loss) 5 55,933 5 32,759 $ 43,393 $ (21.099) *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 longrun protabilityr ofthe various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the nancial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 ) Mountain Total Dirt Bikes Bikes Racing Bikes Sales 5 926,666 5 266,666 5 405,993 5 254,666 Variable manufacturing and selling expenses 457,666 118,866 195,666 152,666 Contribution margin 469,666 156,666 211,666 162,666 Fixed expenses: Advertising, traceable 69,866 8,366 46,?66 29,366 Depreciation of special equipment 43,766 26,366 L266 15,766 Salaries o'F productline managers 115,366 46,566 38,566 36,266 Allocated COI'iI'iIDI'I 'Fixed expenses' 185,266 53,266 81,266 58,366 Total fixed expenses 414,666 123,366 16?,7'66 123,666 Net operating income (loss) $ 55,939 5 32,799 5 43:393 $ (21.939) *Allocated on the basis ofsales 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 longrun protability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? ( Required 1 Required 3 > Dorsey Company manufactures three products from a common input in ajoint processing operation. Joint processing costs up to the splitoff point total $385,000 per quarter. For financial reporting purposes, the company allocates these costs to thejoint products on the basis of their relative sales value at the splitoff point. Unit selling prices and total output at the splitoff point are as follows: Product Selling Price Quarterly Output A $ 2?.00 per pound 14,400 pounds E $ 21.00 per pound 22,400 pounds C $ 33.00 per gallon 5,600 gallons Each product can be processed further after the splitoff point. Additional processing requires no special facilities. The additional processing costs {per quarter) and unit selling prices after further processing are given below: Additional Processing Product Costs Selling Price A $ 89,220 $ 32.80 per pound B 5 129,170 $ 2?.80 per pound C $ 60,150 $ 41.80 per gallon Required: 1. What is the financial advantage {disadvantage} offurther processing each ofthe three products beyond the splitoff point? 2. Based on your analysis in requirement 1, which product or products should be sold at the splitoff point and which product or products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the nancial advantage (disadvantage) of Further processing each of the three products beyond the split-OFF point? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Financial advantage (disadvantage) of further processing l l l l Required 2 ) LJorsey L'ompany man utactures three products trom a common input in ajoint processing operation. Joint processing costs up to the splitoff point total $385,000 per quarter. For financial reporting purposes, the company allocates these costs to thejoint products on the basis of their relative sales value at the splitoff point. Unit selling prices and total output at the splitoff point are as follows: Product Selling Price Quarterly Output A $ 2?.88 per pound 14,488 pounds B $ 21.88 per pound 22,488 pounds C $ 33.88 per gallon 5,688 gallons Each product can be processed further after the splitoff point. Additional processing requires no special facilities. The additional processing costs {per quarter] and unit selling prices after further processing are given below: Additional Processing Product Costs Selling Price A $ 89,228 $ 32.88 per pound B 5 129,178 $ 2?.88 per pound C $ 68,168 $ 41.88 per gallon Required: 1. What is the financial advantage {disadvantage} offurther processing each ofthe three products beyond the splitoff point? 2. Based on your analysis in requirement 1, which product or products should be sold at the splitoff point and which product or products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Sell at splitoff point? Process further? 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 longrun protability ofthe 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] Traceeble xed expenses: Total traceable fixed expenses Product line segment margin [loss] Net operating income (loss) ( Required 2