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.TotalsDirt BikesMountain Bikes Racing BikesContribution margin (loss)Traceable fixed expenses:Total traceable fixed expensesProduct line segment margin (loss)Net operating income (loss)< Required 2Required 3 >< Prev2 of 5Next >.... .....I 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:MountainRacing Bikes$ 60,00033,00027,000TotalDirt BikesBikesSales$ 300,000120,000180,000$ 90,00027,00063,000$ 150,00060,000Variable manufacturing and selling expensesContribution marginFixed expenses:Advertising, traceableDepreciation of special equipmentSalaries of product-line managersAllocated common fixed expenses*Total fixed expenses90,00010,0006,00012,00018,00014,0009,00013,00030,00066,0006,0008,00010,00012,00036,00030,00023,00035,00060,000148,00046,000Net operating income (loss)$ 32,000$ 17,000$ 24,000$ (9,000)*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 notthe line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.Aloxt

An income statement is a financial report that indicates the revenue and expenses of a business. It…

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: Mountain Racing Bikes $ 60,e00 33, еее Bikes Total $ 300,000 120,000 180, e00 Dirt Bikes 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 $ 90,000 27,000 63,000 $ 150,eeе 60,000 90,000 27,000 30,000 23,000 35,000 60,000 10,e00 6,000 12,000 18,000 46,000 14, еее 9,000 13,000 30,e00 66,000 6,000 8,e00 10, e00 12,еее 36, еее $ (9,000) 148,e00 Net operating income (loss) $ 32,000 $ 17,000 $ 24,000 "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 special equipment used to produce racing bikes has no resale value and does not wear out.

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: Mountain Racing Bikes $ 60,e00 33, еее Bikes Total $ 300,000 120,000 180, e00 Dirt Bikes 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 $ 90,000 27,000 63,000 $ 150,eeе 60,000 90,000 27,000 30,000 23,000 35,000 60,000 10,e00 6,000 12,000 18,000 46,000 14, еее 9,000 13,000 30,e00 66,000 6,000 8,e00 10, e00 12,еее 36, еее $ (9,000) 148,e00 Net operating income (loss) $ 32,000 $ 17,000 $ 24,000 "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 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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Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: Number of bikes produced and sold Total costs 460 750 910 Variable costs $110,860 $ ? Fixed costs per year Total costs ? ? Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit ? ? ? ? ? $ 522.75 Required: 1. Complete the table. 2. Calculate Hermosa's contribution margin ratio and its total contribution margin at each sales level indicated in the table assuming the company sells each bike for $690. 4. Calculate Hermosa's break-even point in units and sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 4 Complete the table. (Round your "Cost per Unit" answers to 2 decimal places.) Number of bikes produced and sold 460 Units 750 Units 910 Units Total costs Variable costs $ 110,860 Fixed costs per year Total costs $ 110,860 $ O $ Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $…
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Stuart Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 10,000 and 16,000 trophies per year. The following cost data apply to various activity levels: Required Complete the following table by filling in the missing amounts for the levels of activity shown in the first row of the table. Note: Round "Cost per unit" answers to 2 decimal places. Number of Trophies Total costs incurred Fixed Variable Total costs Cost per unit Fixed Variable Total cost per trophy $ 66,000 $ 42,000 $ 108,000 $ $ 10,000 $ 6.60 4.20 10.80 12,000 $' 14,000 4,20 4.20 $ 66,000 $ 66,000 $ 66,000 50,400 58,800 67,200 116,400 $ 124,800 $ 133,200 4.20 4.20 16,000 $ 4.20 4.20
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