Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer all 3 parts to wheth to produce racing bikes has no resale value and does not wear Required: 1. What is the financial
please answer all 3 parts
to wheth to produce racing bikes has no resale value and does not wear 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 lor 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 Bike Racing Bikes 0 0 0 Contribution margin (loss) Traceable fixed expenses 0 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 $ 0 S OS 0 $ Net operating income (loss) Required 2 Prev 1 of 8 Next > The Regal Cycle Company manufactures three types of blcycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Mountain Sales Total Dirt Bikes Bikes Racing Bikes Variable manufacturing and selling expenses $ 930,000 $ 268,000 $ 402,000 $ 260,000 469,000 114,000 Contribution margin 203,000 152,000 461,000 154,000 199,000 Pixed expenses. 108,000 Advertising, traceable 70,200 8,700 40,700 20,800 Depreciation of special equipment 43,600 20,200 7,500 15,900 Salaries of product-line managers 115,200 40,100 38,300 36,800 Allocated common fixed expenses 186.000 53,600 80,400 52,000 Total fixed expenses 415,000 122,600 166,900 125,500 Net operating income (1088) $ 46,000 $ 31,400 $ 32,100 $. (17,500) "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? lot 1 25 oints Total $ 930,000 469,000 461,000 Dirt Bike $ 268,000 114,000 154,000 Mountain Bikes $ 402,000 203,000 199,000 Racing Bikom $ 260,000 152.000 100.000 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 (losa) 70,200 43,600 115,200 186.000 415,000 $ 46,000 8,700 20,200 40,100 53,600 122.600 $ 31,400 eBook 40,700 7,500 30,300 80,400 166,900 $ 32,100 20,800 15,900 36,800 52,000 125,500 (17.500) 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 the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear ou 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 profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the produktion and sale of racing bikes be discontinued Yes No Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started