Chapter 11 - Homework Saved Help Save & EX Ched 1 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: 10 points Sales Varable manufacturing and selling Dirt Mountain Racing Total Bikes Bikes Bikes $935,000 $270,000 $408,000 $ 257,000 458,000 111,000 195,000 152,000 477,000 159,000 213,000 105,000 eBook expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses set operating income (loss) Hint 70,400 8,700 40,900 20,800 43,500 20,300 7.500 15,700 115,900 40,600 38,500 36,800 187,000 54,000 81,600 51,400 416,800 123,600 168,500 124,700 $ 60,200 $ 35,400 $ 44,500 $(19,700) Print References "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: Required 2 Required 3 Dalal te u PEUT-Ile manages Allocated common fixed expenses Total fixed expenses Net operating Income (loss) . 0,00 38, avu 36. Ovu 187.000 54,000 81,600 51,400 416,800 123,600 168,500 124,700 $ 60,200 $ 35,400 $ 44,500 $(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 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? Retro Required 2 > 1 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 profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Sok Prepare a property 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 0 0 0 0 Contribution margin (loss) Traceable fixed expenses: hces 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 $ 0 $ 0 Not operating income (loss) $ 0
