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Greetings, I got the process wrong. I been trying to find the process via other questions, but seem to have a different process. The Regal
Greetings, I got the process wrong. I been trying to find the process via other questions, but seem to have a different process.
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain blke, and a racing blke. Data on sales and expenses for the past quarter follow: Dirt Bikes Mountain Bikes Racing Bikes Total $931,000 $266,000 $ 407,000 $ 258,000 210,000 151,000 197,000 107,000 Salles Variable manufacturing and 476,000 115,000 selling expenses Contribution margin Fixed expenses: 455,000 151,000 20,400 15,600 35,100 51,600 168,000 122,700 Net operating income (loss) 41,900 $ 28,600 $ 29,000 $(15,700) Advertising, traceable 8,200 44,100 20,800 113,800 40,200 186,20053,200 413.100 122,400 69,000 Depreciation of special Salaries of product-line Allocated common fixed equipment managers expenses* 40,400 7,700 38, 500 81,400 Total fixed expenses 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 blkes 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 varlous product lines. Answer is not complete. Complete this question by entering your answers in the tabs below. Required1Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial (disadvantage) per quarter Required1Required 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 Racing ike Mountain Totals Dirt Bikes ikes Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses Advertising, traceable Depreciation of special equipment Salaries of the product line managers Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (loss)Step by Step Solution
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