please help The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data onsales and expenses for the past quarter follow.MountainRacing BikesTotalDirt BikesBikes$ 921, e00478, 000443,000$ 263,000116,000147,000$ 404,000209,000195,000$ 254, 000153,000101, e00SalesVariable manufacturing and selling expensesContribution marginFixed expenses:Advertising, traceableDepreciation of special equipmentSalaries of product-line managersAllocated common fixed expenses*Total fixed expenses70,0008,80040,8007,40020,40044,00020,70015,900116, 00е40,90038,60036,50050, 800123,600184, 20052,60080,800414, 200$ 28,800123,000167,600Net operating income (loss)$ 24,000$ 27,400$ (22,600)*Allocated on the basis of sales dollars.Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as towhether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale valueand 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 assessingthe long-run profitability of the various product lines.

In this question, we have to make an income statement and find out the financial advantage or…

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FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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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.
Mountain
Racing Bikes
Total
Dirt Bikes
Bikes
$ 921, e00
478, 000
443,000
$ 263,000
116,000
147,000
$ 404,000
209,000
195,000
$ 254, 000
153,000
101, e00
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
70,000
8,800
40,800
7,400
20,400
44,000
20,700
15,900
116, 00е
40,900
38,600
36,500
50, 800
123,600
184, 200
52,600
80,800
414, 200
$ 28,800
123,000
167,600
Net operating income (loss)
$ 24,000
$ 27,400
$ (22,600)
*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 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.

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The Regal Cycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and aracing bike. Data on sales and expenses for the past quarter follow:Dirt Mountain RacingTotal Bikes Bikes BikesSales ............................................ $300,000 $90,000 $150,000 $60,000Variable manufacturingand selling expenses ................ 120,000 27,000 60,000 33,000Contribution margin ...................... 180,000 63,000 90,000 27,000Fixed expenses:Advertising, traceable ............... 30,000 10,000 14,000 6,000Depreciation of specialequipment ............................. 23,000 6,000 9,000 8,000Salaries of product-linemanagers .............................. 35,000 12,000 13,000 10,000Allocated common fixedexpenses* ............................. 60,000 18,000 30,000 12,000Total fixed expenses .................... 148,000 46,000 66,000 36,000Net operating income (loss) ......... $ 32,000 $17,000 $ 24,000 $ (9,000)*Allocated on the basis of sales dollars.Management is…
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I need help with this one please thank you!
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)
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