Please do not give solution in image format thanku The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on salesand expenses for the past quarter follow:TotalSales$930,000Dirt Bikes$265,000 $ 406,000MountainBikesRacing Bikes$ 259,000Variable manufacturing and selling expenses.471,000111,000200,000160,000Contribution margin459,000154,000206,00099,000Fixed expenses:Advertising, traceable.69,9008,20041,00020,700Depreciation of special equipment43,70020,1007,60016,000115,60040,40038,90036,300186,00053,00081,20051,800415,200121,700168,700124,800$ 43,800$ 32,300 $ 37,300 $ (25,800)Salaries of product-line managersAllocated common fixed expenses*Total fixed expensesNet operating income (loss)"Allocated on the basis of sales dollars.Management is considering discontinuing the racing bikes. The special equipment used to produce racing bikes has noresale 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?

Step 1: Compute for the financial advantage/disadvantage for the company. Contribution Margin that…

Answered: The Regal Cycle Company manufactures…

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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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: 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.…
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 DirtBikes Mountain Bikes RacingBikes Sales $ 926,000 $ 266,000 $ 403,000 $ 257,000 Variable manufacturing and selling expenses 479,000 111,000 209,000 159,000 Contribution margin 447,000 155,000 194,000 98,000 Fixed expenses: Advertising, traceable 69,700 8,600 41,000 20,100 Depreciation of special equipment 44,100 20,900 7,500 15,700 Salaries of product-line managers 115,300 40,100 38,500 36,700 Allocated common fixed expenses* 185,200 53,200 80,600 51,400 Total fixed expenses 414,300 122,800 167,600 123,900 Net operating income (loss) $ 32,700 $ 32,200 $ 26,400 $ (25,900) *Allocated on the basis of sales dollars. Management is…
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:…
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 $ 929,000 $ 264,000 $ 409,000 $ 256,000 Variable manufacturing and selling expenses 463,000 113,000 191,000 159,000 Contribution margin 466,000 151,000 218,000 97,000 Fixed expenses: Advertising, traceable 68,800 8,100 40,200 20,500 Depreciation of special equipment 43,500 20,400 7,100 16,000 Salaries of product-line managers 114,400 40,700 38,200 35,500 Allocated common fixed expenses* 185,800 52,800 81,800 51,200 Total fixed expenses 412,500 122,000 167,300 123,200 Net operating income (loss) $ 53,500 $ 29,000 $ 50,700 $ (26,200) *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 DirtBikes Mountain Bikes RacingBikes Sales $ 924,000 $ 264,000 $ 407,000 $ 253,000 Variable manufacturing and selling expenses 477,000 115,000 209,000 153,000 Contribution margin 447,000 149,000 198,000 100,000 Fixed expenses: Advertising, traceable 69,800 8,100 40,900 20,800 Depreciation of special equipment 44,100 20,700 7,800 15,600 Salaries of product-line managers 113,800 40,000 38,600 35,200 Allocated common fixed expenses* 184,800 52,800 81,400 50,600 Total fixed expenses 412,500 121,600 168,700 122,200 Net operating income (loss) $ 34,500 $ 27,400 $ 29,300 $ (22,200) *Allocated on the basis of sales dollars. Management is…
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 DirtBikes Mountain Bikes RacingBikes Sales $ 928,000 $ 265,000 $ 403,000 $ 260,000 Variable manufacturing and selling expenses 460,000 112,000 197,000 151,000 Contribution margin 468,000 153,000 206,000 109,000 Fixed expenses: Advertising, traceable 70,000 8,800 40,300 20,900 Depreciation of special equipment 43,600 20,800 7,600 15,200 Salaries of product-line managers 115,900 40,900 38,900 36,100 Allocated common fixed expenses* 185,600 53,000 80,600 52,000 Total fixed expenses 415,100 123,500 167,400 124,200 Net operating income (loss) $ 52,900 $ 29,500 $ 38,600 $ (15,200) *Allocated on the basis of sales dollars. Management is…
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 $ 929,000 $ 269,000 $ 407,000 $ 253,000 Variable manufacturing and selling expenses 468,000 115,000 196,000 157,000 Contribution margin 461,000 154,000 211,000 96,000 Fixed expenses: Advertising, traceable 70,200 9,000 40,500 20,700 Depreciation of special equipment 43,500 20,500 7,300 15,700 Salaries of product-line managers 114,500 40,200 38,400 35,900 Allocated common fixed expenses* 185,800 53,800 81,400 50,600 Total fixed expenses 414,000 123,500 167,600 122,900 Net operating income (loss) $ 47,000 $ 30,500 $ 43,400 $ (26,900) *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 DirtBikes Mountain Bikes RacingBikes Sales $ 924,000 $ 268,000 $ 400,000 $ 256,000 Variable manufacturing and selling expenses 464,000 116,000 195,000 153,000 Contribution margin 460,000 152,000 205,000 103,000 Fixed expenses: Advertising, traceable 68,800 8,200 40,500 20,100 Depreciation of special equipment 43,000 20,300 7,300 15,400 Salaries of product-line managers 115,000 40,100 38,700 36,200 Allocated common fixed expenses* 184,800 53,600 80,000 51,200 Total fixed expenses 411,600 122,200 166,500 122,900 Net operating income (loss) $ 48,400 $ 29,800 $ 38,500 $ (19,900)…
A 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 $ 917,000 $ 262,000 $ 404,000 $ 251,000 Variable manufacturing and selling expenses 462,000 116,000 194,000 152,000 Contribution margin 455,000 146,000 210,000 99,000 Fixed expenses: Advertising, traceable 69,700 8,500 41,000 20,200 Depreciation of special equipment 44,300 20,900 7,800 15,600 Salaries of product-line managers 116,000 40,100 39,000 36,900 Allocated common fixed expenses* 183,400 52,400 80,800 50,200 Total fixed expenses 413,400 121,900 168,600 122,900 Net operating income (loss) $ 41,600 $ 24,100 $ 41,400 $ (23,900) *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: What is the…
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 DirtBikes Mountain Bikes RacingBikes Sales $ 927,000 $ 266,000 $ 409,000 $ 252,000 Variable manufacturing and selling expenses 471,000 111,000 202,000 158,000 Contribution margin 456,000 155,000 207,000 94,000 Fixed expenses: Advertising, traceable 70,200 8,900 40,800 20,500 Depreciation of special equipment 44,100 20,600 8,000 15,500 Salaries of product-line managers 114,600 40,400 38,400 35,800 Allocated common fixed expenses* 185,400 53,200 81,800 50,400 Total fixed expenses 414,300 123,100 169,000 122,200 Net operating income (loss) $ 41,700 $ 31,900 $ 38,000 $ (28,200) *Allocated on the basis of sales dollars. Management is…

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