Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help! The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses
please help!
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: Mountain Total Dirt Bikes Bikes Racing Bikes Sales $924,000 $ 262,000 $ 406,000 $ 256,000 Variable manufacturing and selling expenses $82.000 119,000 200.000 155.000 Contribution margin 442,000 143,000 198,000 101,000 Pixed expenses Advertising. traceable 69,700 9,000 40,200 20,500 Depreciation of special equipment 44,000 20,300 71900 15,00 Salaries of product-line managers 115,000 40,200 39,800 36.000 Allocated common fixed expenses 184,800 52,400 81200 51,200 Total Fixed expenses 413,500 121.900 168,100 123,500 Not operating Incone loon) 6.28,500 $ 21,100 5.29,900 $ (22,500) "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 Required What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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 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 o 0 Contribution margin (los) Traceable fixed expenses 0 0 0 Total traceable food expenses Product line segment margin (los) 0 05 0$ 0 $ 0 Net operating income (0) $ 0 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