The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales ar expenses for the past quarter follow: Mountain Racing Bikes Dirt Bikes Bikes Total $ 929,000 47e, eae 459,e00 $ 266, e00 113, e0e 153,000 $ 409,000 203,000 206, e00 $ 254,000 154,e00 100, eee 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 9, eee 20,400 40,500 53, 200 123,1e0 40,800 7,800 38,700 81,800 169,100 20, 200 15,500 35, зее 50, 800 121,800 70, eee 43,700 114,500 185,800 414, еее $ 45,000 Net operating income (loss) $ 29,900 $ 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. Required:

The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales ar expenses for the past quarter follow: Mountain Racing Bikes Dirt Bikes Bikes Total $ 929,000 47e, eae 459,e00 $ 266, e00 113, e0e 153,000 $ 409,000 203,000 206, e00 $ 254,000 154,e00 100, eee 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 9, eee 20,400 40,500 53, 200 123,1e0 40,800 7,800 38,700 81,800 169,100 20, 200 15,500 35, зее 50, 800 121,800 70, eee 43,700 114,500 185,800 414, еее $ 45,000 Net operating income (loss) $ 29,900 $ 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. Required:

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:
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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)
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: Dirt Mountain Bikes Racing Bikes Total Bikes $ 923, e00 $263,000 $ 467, e00 456, e00 Sales 409, 090 $ 251,880 197,000 212,000 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 115,000 148,000 155,000 96,000 69, 300 42, 700 114, 600 184, 600 411, 200 $ 44,800 $ 26, 300 $ 8,500 20,300 40, 300 52,600 121,700 40,200 7,200 38,500 81,800 167,700 20, 600 15,200 35,800 50, 200 121, 800 44,300 $(25, 808) Net operating income (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…
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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 Sales Dirt Bikes Mountain Bikes Racing Bikes Total $90,000 $150,000 $70,000 $310,000 Variable manufacturing and selling 27,000 60,000 40,000 127,000 expenses Contribution Margin $63,000 $ 90,000 $30,000 $183,000 Fixed expenses Advertising 10,000 14,000 15,000 39,000 Depreciation of special equipment 6,000 9,000 2,000 17,000 Salaries of product line managers 12,000 13,000 18,000 43,000 Allocated common fixed expense 18,000 30,000 4,000 52,000 Total fixed expenses $46,000 $66,000 $39,000 $151,000 Net operating income (loss) $17,000 $24,000 $ (9,000) $ 32,000 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. Should production…
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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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 925,000 $ 265,000 $ 402,000 $ 258,000 Variable manufacturing and selling expenses 466,000 111,000 195,000 160,000 Contribution margin 459,000 154,000 207,000 98,000 Fixed expenses: Advertising, traceable 69,000 8,200 40,500 20,300 Depreciation of special equipment 43,200 20,100 7,700 15,400 Salaries of product-line managers 114,400 40,400 38,900 35,100 Allocated common fixed expenses* 185,000 53,000 80,400 51,600 Total fixed expenses 411,600 121,700 167,500 122,400 Net operating income (loss) $ 47,400 $ 32,300 $ 39,500 $ (24,400) *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.…
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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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 923,000 $ 266,000 $ 405,000 $ 252,000 Variable manufacturing and selling expenses 473,000 111,000 205,000 157,000 Contribution margin 450,000 155,000 200,000 95,000 Fixed expenses: Advertising, traceable 69,200 8,400 40,600 20,200 Depreciation of special equipment 43,400 20,700 7,200 15,500 Salaries of product-line managers 114,600 40,600 38,100 35,900 Allocated common fixed expenses* 184,600 53,200 81,000 50,400 Total fixed expenses 411,800 122,900 166,900 122,000 Net operating income (loss) $ 38,200 $ 32,100 $ 33,100 $ (27,000) *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 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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 926,000 $ 269,000 $ 405,000 $ 252,000 Variable manufacturing and selling expenses 468,000 111,000 206,000 151,000 Contribution margin 458,000 158,000 199,000 101,000 Fixed expenses: Advertising, traceable 69,800 8,800 40,700 20,300 Depreciation of special equipment 43,700 20,400 7,400 15,900 Salaries of product-line managers 114,200 40,700 38,400 35,100 Allocated common fixed expenses* 185,200 53,800 81,000 50,400 Total fixed expenses 412,900 123,700 167,500 121,700 Net operating income (loss) $ 45,100 $ 34,300 $ 31,500 $ (20,700) *Allocated on the basis of sales dollars. Management is considering discontinuing the racing bikes. The special equipment used to produce racing bikes has no resale value and does not wear out. Required:…