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espenses for the pest quater follow. Dirt kes unta acing ikes Total ikes Seles variale aufacturing and selling epenses Contriution argin Fed epenses Advertising, tracele Depreciation of special eudonent Salaries of product-ine anagers Allocated comon fed epenses Tutal fied egenses et operating incone (loss) 10, IN 11,00 20,0 14, 4,1 , 7, 114, ,00 4 4,400 1 26,0 I 1,20 ,c "Alocaned on the bass of sales dolars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendaton as to whether or not the ine should be aiscontnued. The special equpment used to produce racing bikes has no resale value and does not wear out. Required: 1 What is the financial advantage disadvantage per quater of ascontinuing the racing bikes? 2. Should the producnon and sale of racing bikes be discontinuea? 3. Prepere a property formamed segmented ncome sanement that would be more usetul to management in assessing the long-run profitability of the vanous product ines Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reguired what is the financal advantage (disadvartage) per quarter of dacontinuing the racing bàns? Required Required 2 Reuired Should the production and sale of racing bikes be dscontinued ONe Required 1 Required 2 Required 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 Bes Mountain Bkes Racing Bkes Contibution margin os) Traceatle ed epenses Totalaceable tedepenses Product ine segment margin oss) Net operating income de

espenses for the pest quater follow. Dirt kes unta acing ikes Total ikes Seles variale aufacturing and selling epenses Contriution argin Fed epenses Advertising, tracele Depreciation of special eudonent Salaries of product-ine anagers Allocated comon fed epenses Tutal fied egenses et operating incone (loss) 10, IN 11,00 20,0 14, 4,1 , 7, 114, ,00 4 4,400 1 26,0 I 1,20 ,c "Alocaned on the bass of sales dolars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendaton as to whether or not the ine should be aiscontnued. The special equpment used to produce racing bikes has no resale value and does not wear out. Required: 1 What is the financial advantage disadvantage per quater of ascontinuing the racing bikes? 2. Should the producnon and sale of racing bikes be discontinuea? 3. Prepere a property formamed segmented ncome sanement that would be more usetul to management in assessing the long-run profitability of the vanous product ines Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reguired what is the financal advantage (disadvartage) per quarter of dacontinuing the racing bàns? Required Required 2 Reuired Should the production and sale of racing bikes be dscontinued ONe Required 1 Required 2 Required 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 Bes Mountain Bkes Racing Bkes Contibution margin os) Traceatle ed epenses Totalaceable tedepenses Product ine segment margin oss) Net operating income de

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Dire Bikes Bikes $ 921, 000 s265,0 s 404,000 S 252,000 Hountain Racing Bikes Total sales variable manufacturing and selling expenses 447,000 150,e0 16,0 contribution nargin Fixed expenses: Advertising, traceable Depreciation of special equipnent salaries of product-1ine managers Allocated comnon fixed expenses Total fixed exxpenses 101,000 8,900 44,00e 20,see 114,300 40,100 184, 200 53,800 412,Gee 1 00 40,400 7,500 38,100 se, see 166,s00 122,600 24,400 $ 26,100 S 29,200 $(21,600) 20,00 16,00e 35,400 50,400 70,100 Net operating 1ncone (loss) "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 bikes? 2. Should the production and sale of racing bikes be discotinued? 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 Reguired 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No Required 1 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 doss) Traceable ficed expenses Total traceable fxed expenses Product line segment margin (loss) Net operating income (loss)
Transcribed Image Text: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. Dire Bikes Bikes $ 921, 000 s265,0 s 404,000 S 252,000 Hountain Racing Bikes Total sales variable manufacturing and selling expenses 447,000 150,e0 16,0 contribution nargin Fixed expenses: Advertising, traceable Depreciation of special equipnent salaries of product-1ine managers Allocated comnon fixed expenses Total fixed exxpenses 101,000 8,900 44,00e 20,see 114,300 40,100 184, 200 53,800 412,Gee 1 00 40,400 7,500 38,100 se, see 166,s00 122,600 24,400 $ 26,100 S 29,200 $(21,600) 20,00 16,00e 35,400 50,400 70,100 Net operating 1ncone (loss) "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 bikes? 2. Should the production and sale of racing bikes be discotinued? 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 Reguired 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No Required 1 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 doss) Traceable ficed expenses Total traceable fxed expenses Product line segment margin (loss) Net operating income (loss)
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