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Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers i Allocated common fixed
Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers i Allocated common fixed expenses" Total fixed expenses Net operating income (loss) Dirt Mountain Bikes Racing Bikes Total Bikes $ 922,000 $262,000 $ 407,000 $ 253,000 480,000 117,000 203,000 160,000 442,000 145,000 204,000 93,000 69,300 8,200 40,900 20,200 7,200 15,900 43,500 20,400 116,300 40,300 184,400 52,400 37,000 39,000 81,400 50,600 413,500 121,300 168,500 123,700 $ 28,500 $ 23,700 $ 35,500 $(30, 700) 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? Required 2 > 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 Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) < Required 2 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers i Allocated common fixed expenses" Total fixed expenses Net operating income (loss) Dirt Mountain Bikes Racing Bikes Total Bikes $ 922,000 $262,000 $ 407,000 $ 253,000 480,000 117,000 203,000 160,000 442,000 145,000 204,000 93,000 69,300 8,200 40,900 20,200 7,200 15,900 43,500 20,400 116,300 40,300 184,400 52,400 37,000 39,000 81,400 50,600 413,500 121,300 168,500 123,700 $ 28,500 $ 23,700 $ 35,500 $(30, 700) 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? Required 2 > 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 Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) < Required 2 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers i Allocated common fixed expenses" Total fixed expenses Net operating income (loss) Dirt Mountain Bikes Racing Bikes Total Bikes $ 922,000 $262,000 $ 407,000 $ 253,000 480,000 117,000 203,000 160,000 442,000 145,000 204,000 93,000 69,300 8,200 40,900 20,200 7,200 15,900 43,500 20,400 116,300 40,300 184,400 52,400 37,000 39,000 81,400 50,600 413,500 121,300 168,500 123,700 $ 28,500 $ 23,700 $ 35,500 $(30, 700) 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? Required 2 > 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 Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) < Required 2
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