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The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the
The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 914,000 $ 263,000 $ 400,000 $ 251,000 Variable manufacturing and selling expenses 481,000 115,000 209,000 157,000 Contribution margin 433,000 148,000 191,000 94,000 Fixed expenses: Advertising, traceable 69,600 8,600 40,400 20,600 Depreciation of special equipment 44,600 20,900 7,800 15,900 Salaries of product-line managers 114,800 40,800 38,200 35,800 Allocated common fixed expenses* 182,800 52,600 80,000 50,200 Total fixed expenses 411,800 122,900 166,400 122,500 Net operating income (loss) $ 21,200 $ 25,100 $ 24,600 $ (28,500)
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