The Regal Cycle Company manufactures three types of bicycles

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:

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.


1.         Should production and sale of the racing bikes be discontinued? Explain. Show computations to support your answer.

2.         Recast the above data in a format that would be more usable to management in assessing the long-run profitability of the various product lines.


  • Access to 1 Million+ Textbook solutions
  • Ask any question from 24/7 available


Copyright © 2019 SolutionInn All Rights Reserved