Total $ 919,000 469,000 450,000 Dirt Bikes $266,000 118,800 148,000 Mountain Bikes $402,000 193,000 209,000 Racing Bikes 5 251,000 158,000 93,000 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) 69,560 8,400 40,900 20,200 43,600 20,200 7,800 15,600 115,400 40,200 38,300 36,900 183,800 53,200 80,400 50,200 412,300 122,000 167,400 122,900 $ 37,700 $ 26,000 $ 41,600 $(29,900) *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 the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear OL 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-ru profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required: Requires 2 Required 3 What is the financovantage (sadvantage) per Quarter of discontinuing the racing bikes 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: Dirt Mountain Total $919,000 469.000 450.000 $266,000 118.000 148.000 $40 199 200.000 Racing Bikes 251, de 158.000 93.00 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) 69,5ee 3,400 40.900 20,20 43,600 20,200 7.300 15.60 115,400 40,200 36.900 183,800 $3,200 2.400 50,200 412.300 122.000 167.400 12200 $ 37,700 $ 26,00 $ 41,6ee5(29900 "Allocated on the basis of sales dollars Management is concerned about the continued losses shown by the racing bikes and was a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes nas 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 loro run profitability of the various product lines Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 til Next > e to search TOSHIBA IU LUHILLITLU SUULTE continued losses shown by the racing bikes and wants a recommendation as to whe the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not w 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 wou be more useful to management in assessing the profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued Yes ONO Required 1 Required 3 > to Next > Complete this question by entering your answers in the tabs below. Required i 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)
