The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6648d2526e609_4666648d25205d9a.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6648d2531dfa2_4666648d252c4dfd.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6648d253ac7e6_4676648d2534c010.jpg)
Transcribed Image Text:
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: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) Total $ 924,000 Dirt Bikes $ 263,000 460,000 114,000 Mountain Bikes $ 402,000 193,000 Racing Bikes $ 259,000 153,000 464,000 149,000 209,000 106,000 69,700 8,300 40,700 20,700 44,300 20,600 8,000 15,700 115,700 40,600 38,200 36,900 184,800 52,600 80,400 51,800 414,500 122,100 167,300 125,100 $ 49,500 $ 26,900 $ 41,700 $ (19,100) "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. Required 11 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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 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: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) Total $ 924,000 Dirt Bikes $ 263,000 460,000 114,000 Mountain Bikes $ 402,000 193,000 Racing Bikes $ 259,000 153,000 464,000 149,000 209,000 106,000 69,700 8,300 40,700 20,700 44,300 20,600 8,000 15,700 115,700 40,600 38,200 36,900 184,800 52,600 80,400 51,800 414,500 122,100 167,300 125,100 $ 49,500 $ 26,900 $ 41,700 $ (19,100) "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. Required 11 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
A U.S Company David Inc. sold merchandise to Fernando SA for 10,000 on September 14, 2017. The spot rate for euro is $0.720 on this day. On October 12, 2018, David Inc. purchased merchandise from...
-
Bridgeman Paper Co. reported the following selected balances on its financial statements for each of the four years 20062009: Based on these balances, reconstruct the valuation entries that must have...
-
In the city water tower, water is pumped up to a level 25 m above ground in a pressurized tank with air at 125 kPa over the water surface. This is illustrated in Fig. P2.84. Assuming the water...
-
Use the August information from the Work Together above. An income statement for Cheries Pizza is included in the Working Papers. Work independently to complete this problem. 1. Calculate the...
-
Various pension plan information of the Kerem Company for 2007 and 2008 is as follows: Required Fill in the blanks lettered (a) through (l). All the necessary information is listed. It is not...
-
In this discussion, you will need to refer back to Erikson's psychosocial development stage model. After reviewing Erikson's life stage model, choose the stage that seems most influential in shaping...
-
Introduction In this assignment you will write a small C program to read the coefficients of a third degree equation, and use a numerical integration method for calculating a numerical value of a...
-
Explain the impact of chromosomal rearrangements and translocations on gene expression, and how these genetic abnormalities can lead to leukemias and other types of cancer
-
What are the underlying mechanisms of organizational learning and knowledge management, and how do they contribute to sustained competitive advantage in rapidly changing environments?
-
How do organizational structures and hierarchies affect communication flow and decision-making processes within an organization ?
-
Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 25% each of the last three...
-
Describe the role of spliceosomes in pre-mRNA processing, and how alterations in spliceosome components can lead to splicing-related diseases .
-
Mr. Morant is 68 years old and has Net Income for Tax Purposes of $29,500, which is comprised of Old Age Security benefits and pension income paid out of his Registered Retirement Income Fund. He is...
-
Draw the major product for each of the following reactions: (a) (b) (c) 1) 9-BBN 2) H2O2, NaOH 1) Disiamylborane 2) H20, NaOH
-
A process costing system would most likely be used for all of the following except a. a manufacturer of plywood sheets. c. a tailor. b. a mens barbershop. d. a hay farmer.
-
A company with four production departments that had been using a plant-wide overhead rate based on direct labor hours changes to a departmental overhead rate. Product A's total allocated overhead...
-
Henry Manufacturing, which uses direct labor hours to apply overhead to its product line, undertook an extensive renovation and modernization program two years ago. Manufacturing processes were...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App