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: Ditt Mountain Racing Total Bikes Bikes Bikes $ 931,000 $269,000 $405,000 $ 257,000 476,000 111,000 205,000 160.000 455,000 158,000 200.000 97,000 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 (loss) 69,600 8,700 40,100 20.800 43,800 20,200 7,700 15,900 115,900 40,600 38,800 36,500 186,200 53,800 81,000 51.400 415,500 123, 300 167,600 124, 600 $ 39,500 $ 34,700 $ 32,400 ${27,600) ces "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the rating 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? Prey 1 of 5 Next > Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the productiop and sale of racing bikes be discontinued? 3. Prepare a properly folmatted segmented income statement that would be more useful to management profitability of the various product lines. at Complete this question by entering your answers in the tabs below. ences Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial (disadvantage) per quarter Prey 1 of 5 Next > lon MacBook Air 1 VIOUS are in La Guairaye qurduvaldyti per quantes UI ULUTTU U ROLI DIRES 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 2.5 points Complete this question by entering your answers in the tabs below. 8 00:52:49 Required 1 Required 2 Required 3 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. eBook Hint Sales $ Totals Dirt Bikes Mountain Bikes Racing Bikes 931,000 $ 269,000 $ 405,000 $ 257,000 476,000 111,000 205,000 160,000 455,000 158.000 200,000 97,000 Print 8,700 References 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 found expenses Net operating income (los) 89,600 43,8001 115,900 229,300 225,700 $ 20.200 40,600 69,500 88,500 40,100 7,700 38,800 86,600 113,400 $ 20,800 15,900 36,500 73.200 23.800 $ 225.700
