1 | ||||
Current Total | Total If Racing Bikes Are Dropped | Difference: Net Operating Income | ||
Sales | 926000 | 673000 | -253000 | |
Variable manufacturing and selling expenses | 471000 | 318000 | 153000 | |
Contribution margin (loss) | 455000 | 355000 | -100000 | |
Fixed expenses: | ||||
Advertising, traceable | 69300 | 48500 | 20800 | |
Depreciation on special equipment | 43700 | 43700 | 0 | |
Salaries of product manager | 115300 | 79900 | 35400 | |
Common allocated costs | 185200 | 185200 | 0 | |
Total fixed expenses | 413500 | 357300 | 56200 | |
Net operating income (loss) | 41500 | -2300 | -43800 | |
Financial (disadvantage) per quarter $(43800) | ||||
2 | ||||
No, production and sale of racing bikes should not be discontinued | ||||
3 | ||||
Total | Dirt Bikes | Mountain Bikes | Racing Bikes | |
Sales | 926000 | 269000 | 404000 | 253000 |
Variable manufacturing and selling expenses | 471000 | 113000 | 205000 | 153000 |
Contribution margin (loss) | 455000 | 156000 | 199000 | 100000 |
Traceable fixed expenses: | ||||
Advertising, traceable | 69300 | 8400 | 40100 | 20800 |
Depreciation on special equipment | 43700 | 20600 | 7300 | 15800 |
Salaries of product manager | 115300 | 40900 | 39000 | 35400 |
Total traceable fixed expenses | 228300 | 69900 | 86400 | 72000 |
Product line segment margin | 226700 | 86100 | 112600 | 28000 |
Common fixed expenses | 185200 | |||
Net operating income (loss) | 41500 |
Exercise 12-2 Dropping or Retaining a Segment [LO12-2] The Regal Cycle Company manufactures three types of...
Exercise 12-2 Dropping or Retaining a Segment [LO12-2] 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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 932,000 $ 269,000 $ 404,000 $ 259,000 Variable manufacturing and selling expenses 471,000 113,000 202,000 156,000 Contribution margin 461,000 156,000 202,000 103,000 Fixed expenses: Advertising, traceable 69,500 8,600 40,600 20,300 Depreciation of special equipment 43,800...
Exercise 12-2 Dropping or Retaining a Segment (LO12-2] 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: Dirt Mountain Racing Total Bikes Bikes Bikes $ 916,000 $261,000 $ 403,000 $ 252,000 480,000 115,000 210,000 155,000 436,000 146,000 193, 000 97,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated...
Exercise 12-2 Dropping or Retaining a Segment (LO12-2] 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: Dirt Mountain Racing Total Bikes Bikes Bikes $926,000 $265,000 $407,000 $ 254,000 477,000 115,000 208,000 154,000 449,000 150,000 199,000 100.000 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*...
Exercise 12-2 Dropping or Retaining a Segment[LO12-2] 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 Dirt Mountain Total Bikes Bikes $ 926,000 $266, 000 $ 484,800 463,800 111,800 193,888 463,890 155,800 211,800 Racing Bikes $ 256, 800 159,808 97,800 Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated...
Exercise 12-2 Dropping or Retaining a Segment [LO12-2] 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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 928,000 $ 267,000 $ 409,000 $ 252,000 Variable manufacturing and selling expenses 474,000 117,000 203,000 154,000 Contribution margin 454,000 150,000 206,000 98,000 Fixed expenses: Advertising, traceable 69,500 8,700 40,500 20,300 Depreciation of special equipment 43,300...
Exercise 12-2 Dropping or Retaining a Segment [LO12-2] 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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 300,000 $ 90,000 $ 150,000 $ 60,000 Variable manufacturing and selling expenses 120,000 27,000 60,000 33,000 Contribution margin 180,000 63,000 90,000 27,000 Fixed expenses: Advertising, traceable 30,000 10,000 14,000 6,000 Depreciation of special equipment 23,000...
Exercise 11-2 Dropping or Retaining a Segment [LO11-2] 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 Total $ 926,000 461,000 465,000 Dirt Mountain Bikes Bikes $268.000 $ 406,000 113,000 197.000 155,000 209,000 Racing Bikes 5 252.000 151,000 101.000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product line managers Allocated...
Exercise 11-2 Dropping or Retaining a Segment (L011-2] 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: Dirt Total Bikes $ 925,000 $265,000 469,000 118,000 456,000 147,000 Mountain Racing Bikes Bikes $ 406,000 $ 254,000 192,000 159,000 214,000 95,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common...
Exercise 11-2 Dropping or Retaining a Segment [LO11-2] 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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 914,000 $ 262,000 $ 401,000 $ 251,000 Variable manufacturing and selling expenses 471,000 115,000 199,000 157,000 Contribution margin 443,000 147,000 202,000 94,000 Fixed expenses: Advertising, traceable 70,000 8,600 40,500 20,900 Depreciation of special equipment 44,100...
Exercise 11-2 Dropping or Retaining a Segment (LO11-2] 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: Dirt Mountain Racing Total Bikes Bikes Bikes $ 916,000 $262,000 $ 404,000 $ 250,000 462,000 115,000 191,000 156,000 454,000 147,000 213,000 94,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common...