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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 $ 920,000 $ 261,000 $ 402,000 $ 257,000 Variable manufacturing and selling expenses 462,000 110,000 194,000 158,000 Contribution margin 458,000 151,000 208,000 99,000 Fixed expenses: Advertising, traceable 70,100 9,000 40,100 21,000 Depreciation of special equipment 43,400 20,600 7,300 15,500 Salaries of product-line managers 116,300 40,900 38,500 36,900 Allocated common fixed expenses* 184,000 52,200 80,400 51,400 Total fixed expenses 413,800 122,700 166,300 124,800 Net operating income (loss) $ 44,200 $ 28,300 $ 41,700 $ (25,800)
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