please answer in detail describe each and every point and step with full explantion , computation , formulation thanks no copy paste from other answer all requirements with full working answer in text The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales andexpenses for the past quarter follow:SalesVariable manufacturing and selling expensesContribution marginFixed expenses:Total$ 930,000482,000448,000Dirt Bikes$ 264,000116,000148,00070,00044,200115,100186,000415,300$ 32,700Advertising, traceableDepreciation of special equipmentSalaries of product-line managersAllocated common fixed expenses.Total fixed expensesNet 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 notthe line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.8,80020,600MountainBikes5 408,000207,000201,00040,70052,800122,900$ 25,100Racing Bikes$ 258,000159,00099,00040,9007,90038,70081,600169,100$ 31,90020,30015,70035,70051,600123,300$ (24,300)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-runprofitability of the various product lines. Required 1 Required 2 Required 3What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes?Financial advantage (disadvantage) per quarterRequired 1 Required 2 Required 3Should the production and sale of racing bikes be discontinued?OYesONORequired 1 Required 2Prepare a property formatted segmented income statement that would be more useful to management in assessing the long-runprofitability of the various product lines.Contribution margin (los)Traceable fixed expenses:Required 3Total traceable fixed expensesProduct line segment margin (los)Net operating income (s)$Totals6Dirt Bikes Mountain Bike Racing Bikes1010$10600$609600

In some cases, management has to take decisions regarding whether or not to continue a product line…

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 Variable manufacturing and selling expenses Contribution margin Fixed expenses: Total $ 930,000 482,000 448,000 70,000 44,200 115,100 Dirt Bikes $ 264,000 116,000 148,000 186,000 415,300 $ 32,700 Mountain Bikes $ 408,000 207,000 201,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated connon fixed expenses Total fixed expenses 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 produce racing bikes has no resale value and does not wear out. 40,900 7,900 Racing Bikes $ 258,000 159,000 99,000 8,800 20,300 20,600 15,700 40,700 35,700 52,800 51,600 122,900 123,300 $ 25,100 $ 31,900 $ (24,300) 38,700 81,600 169,100 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.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q