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The Regal Cyde Company manufactures three types of bicycles a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for
The Regal Cyde 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. Dirt Mountain Racing Total Bikes Bikes Bikes $929,000 $267,eee $ 407,000 $ 255,000 463,000 114, eee 193,eee 156,000 466.000 153, see 214,90 99,000 Sales var Table 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 Incone (loss) 69,500 8,300 49,800 20,400 43,100 22,200 7,600 15,100 116,300 40,600 38,900 36,800 185,800 53,400 81,400 51,00 414,700 122,500 168,700 121, see $ 51,300 $ 30,560 $ 45,100 $(24,500) "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 (duadvantage per quarter of discontinuing the Racing Bikes? 3. Preparo a property formatted togmered 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 What is the financal advantage (disadvantage) per quarter of discontinuing the Racing Bikes
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