Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment...

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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) *Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $ 266,000 Mountain Bikes $ 404,000 Racing Bikes $ 251,000 486,000 118,000 208,000 160,000 435,000 148,000 196,000 91,000 69,000 8,200 40,300 20,500 43,700 20,300 7,900 15,500 115,000 40,900 38,800 35,300 184,200 53,200 80,800 50,200 411,900 122,600 167,800 121,500 $ 23,100 $ 25,400 $ 28,200 $ (30,500) ht ences 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 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. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 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) *Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $ 266,000 Mountain Bikes $ 404,000 Racing Bikes $ 251,000 486,000 118,000 208,000 160,000 435,000 148,000 196,000 91,000 69,000 8,200 40,300 20,500 43,700 20,300 7,900 15,500 115,000 40,900 38,800 35,300 184,200 53,200 80,800 50,200 411,900 122,600 167,800 121,500 $ 23,100 $ 25,400 $ 28,200 $ (30,500) ht ences 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 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. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0

Answer rating: 100% (QA)

Required 1 Financial AdvantageDisadvantage of Discontinuing Racing Bikes Financial Advantage Elimination of racing bike losses Discontinuing the racing bike line would eliminate the 30500 quarterly lo... View the full answer