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) *Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $ 266,000 Mountain Bikes $ 404,000 Racing Bikes $ 251,000 486,000 118,000 208,000 160,000 435,000 148,000 196,000 91,000 69,000 8,200 40,300 20,500 43,700 20,300 7,900 15,500 115,000 40,900 38,800 35,300 184,200 53,200 80,800 50,200 411,900 122,600 167,800 121,500 $ 23,100 $ 25,400 $ 28,200 $ (30,500) ht ences 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. Complete this question by entering your answers in the tabs below. 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. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0
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) *Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $ 266,000 Mountain Bikes $ 404,000 Racing Bikes $ 251,000 486,000 118,000 208,000 160,000 435,000 148,000 196,000 91,000 69,000 8,200 40,300 20,500 43,700 20,300 7,900 15,500 115,000 40,900 38,800 35,300 184,200 53,200 80,800 50,200 411,900 122,600 167,800 121,500 $ 23,100 $ 25,400 $ 28,200 $ (30,500) ht ences 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. Complete this question by entering your answers in the tabs below. 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. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
\table[[,Total,Dirt Bikes,\table[[Mountain],[Bikes]],Racing Bikes],[Sales,$921,000,$266,000,$404,000,$251,600
Transcribed Image Text: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)
*Allocated on the basis of sales dollars.
Total
$ 921,000
Dirt Bikes
$ 266,000
Mountain
Bikes
$ 404,000
Racing Bikes
$ 251,000
486,000
118,000
208,000
160,000
435,000
148,000
196,000
91,000
69,000
8,200
40,300
20,500
43,700
20,300
7,900
15,500
115,000
40,900
38,800
35,300
184,200
53,200
80,800
50,200
411,900
122,600
167,800
121,500
$ 23,100
$ 25,400
$ 28,200
$ (30,500)
ht
ences
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.
Complete this question by entering your answers in the tabs below.
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.
Contribution margin (loss)
Traceable fixed expenses:
Total traceable fixed expenses
Product line segment margin (loss)
Net operating income (loss)
Totals
Dirt Bikes Mountain Bikes
Racing Bikes
0
0
0
0
0
0
0
0
0
$
0 $
0
$
0
$
0
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