The Regal Cycle Company manufactures three types of bic expenses for the past quarter follow: Mountain Racing Bikes Dirt Bikes $ 266,000 113, еее 153,000 Bikes $ 409,000 203,000 206,e00 Total 929, eee 470, e00 459, e00 $ 254, 000 154, еее 100, 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 43,700 114,500 185,800 9,e00 20,400 40,500 53,200 40,800 7,800 38,700 81,800 169,100 20, 200 15,500 35,300 50,800 121, 800 414,000 123,100 $ 29,900 Net operating income (loss) $ 45,000 $ 36,900 $ (21,800) "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.

The Regal Cycle Company manufactures three types of bic expenses for the past quarter follow: Mountain Racing Bikes Dirt Bikes $ 266,000 113, еее 153,000 Bikes $ 409,000 203,000 206,e00 Total 929, eee 470, e00 459, e00 $ 254, 000 154, еее 100, 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 43,700 114,500 185,800 9,e00 20,400 40,500 53,200 40,800 7,800 38,700 81,800 169,100 20, 200 15,500 35,300 50,800 121, 800 414,000 123,100 $ 29,900 Net operating income (loss) $ 45,000 $ 36,900 $ (21,800) "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.

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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