The Regal Cycle Company manufactures three types of bicycles-a dirt bike, 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: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) Total $ 925,000 466,000 459,000 69,100 44,100 115,600 185,000 413,800 $ 45,200 Dirt Bikes $ 266,000 111,000 155,000 8,300 20,300 40,400 53,200 Mountain Bikes $ 406,000 197,000 209,000 40,100 8,000 38,400 81,200 167,700 122,200 $ 32,500 $ 41,300 Racing Bikes $ 253,000 158,000 95,000 20,700 15,800 36,800 50,600 123,900 $ (28,900) "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 special equipment used to produce racing bikes has no resale value and does not wear out "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: 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.
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, 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: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) Total $ 925,000 466,000 459,000 69,100 44,100 115,600 185,000 413,800 $ 45,200 Dirt Bikes $ 266,000 111,000 155,000 8,300 20,300 40,400 53,200 Mountain Bikes $ 406,000 197,000 209,000 40,100 8,000 38,400 81,200 167,700 122,200 $ 32,500 $ 41,300 Racing Bikes $ 253,000 158,000 95,000 20,700 15,800 36,800 50,600 123,900 $ (28,900) "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 special equipment used to produce racing bikes has no resale value and does not wear out "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: 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.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1PB: Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major...
Related questions
Question
please solve all with proper working no copy paste answer in text
![The Regal Cycle Company manufactures three types of bicycles-a dirt bike, 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:
Advertising, traceable.
Depreciation of special equipment
Salaries of product-line managers
Allocated common fixed expenses
Total fixed expenses
Net operating income (loss)
Total
$ 925,000
466,000
459,000
69,100
44,100
115,600
185,000
413,800
$ 45,200
Dirt Bikes
$ 266,000
111,000
155,000
Required 1
Complete this question by entering your answers in the tabs below.
Mountain
Bikes
$ 406,000
197,000
209,000
Racing Bikes
$ 253,000
158,000
95,000
8,300
40,100
20,300
8,000
40,400
38,400
36,800
53,200
81,200
50,600
122,200
167,700
123,900
$ 32,800 $ 41,300 $ (28,900)
"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 special equipment used to produce racing bikes has no resale value and does not wear out
"Allocated on the basis of sales dollars.
20,700
15,800
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 2 Required 3
What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes?
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6a5005c-859b-46db-a47b-33f1bc648c90%2Fc9392498-d14e-4e8a-814e-e2352e0a55b3%2Ftkcyvv9_processed.png&w=3840&q=75)
Transcribed Image Text:The Regal Cycle Company manufactures three types of bicycles-a dirt bike, 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:
Advertising, traceable.
Depreciation of special equipment
Salaries of product-line managers
Allocated common fixed expenses
Total fixed expenses
Net operating income (loss)
Total
$ 925,000
466,000
459,000
69,100
44,100
115,600
185,000
413,800
$ 45,200
Dirt Bikes
$ 266,000
111,000
155,000
Required 1
Complete this question by entering your answers in the tabs below.
Mountain
Bikes
$ 406,000
197,000
209,000
Racing Bikes
$ 253,000
158,000
95,000
8,300
40,100
20,300
8,000
40,400
38,400
36,800
53,200
81,200
50,600
122,200
167,700
123,900
$ 32,800 $ 41,300 $ (28,900)
"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 special equipment used to produce racing bikes has no resale value and does not wear out
"Allocated on the basis of sales dollars.
20,700
15,800
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 2 Required 3
What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes?
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.
![Required 1
Required 2
Contribution margin (loss)
Traceable fixed expenses
Should the production and
Should the production and sale of racing bikes be discontinued?
Required 3
Total traceable fixed expenses
Product line segment margin (loss)
Net operating income (loss)
Required 2
Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-ru
profitability of the various product lines.
or racing bikes be discontinued?
Totals
Dirt Bikes
Mountain Bikes Racing Bikes](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6a5005c-859b-46db-a47b-33f1bc648c90%2Fc9392498-d14e-4e8a-814e-e2352e0a55b3%2Fbd1csvk_processed.png&w=3840&q=75)
Transcribed Image Text:Required 1
Required 2
Contribution margin (loss)
Traceable fixed expenses
Should the production and
Should the production and sale of racing bikes be discontinued?
Required 3
Total traceable fixed expenses
Product line segment margin (loss)
Net operating income (loss)
Required 2
Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-ru
profitability of the various product lines.
or racing bikes be discontinued?
Totals
Dirt Bikes
Mountain Bikes Racing Bikes
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College