ernal_browser-launchUrl=https253A%252F%252Fims.education.com 252Fmghmidware Business Law 1 te Section 53 - Mat. MARK 4300 Com all Learning Evo Valource Books... Handshake Blow enam 3 mult Vuware Chapters 5,6 & 13 Recap Help Save 12 Total $926.000 48.000 452000 Dirt Bikes $262.000 Mountain Bikes $410,000 350.000 211.000 Racing Bikes $ 250,000 550.000 37.000 169,000 8.37 point Sales Variable naturacturing and selline expenses Contribution margin Pixed expenses Advertising, treceable Depreciation of special equipest salaries of product line managers Allocated common fixed expenses Total Fixed expenses Het operating incon (loss) 3.100 20.500 40,400 04130 69,200 13,500 113,500 185,200 411.400 545.600 40.300 7. 38,000 82.000 167.500 $6.400 20.000 15,700 35.100 50.800 112,400 525,630) 121.400 "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 (disadvantage) per quarter of discontinuing the Racing kes? 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 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial advantage (date) perut Required 2 > Total $ 926,000 469,000 457,000 Dirt Bikes $ 262,000 113,000 149,000 B $ 41 19 21 CON 4 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) 69,200 43,500 113,500 185,200 411,400 $ 45,600 8,100 20,500 40,400 52,400 121,400 $ 27,600 moll 3 8 16 $ 4 "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants the line should be discontinued. The special equipment used to produce racing bikes has n Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bik 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 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 O No
