Answer 1
Financial disadvantage = $ 35,600.
Calculations:
Racing Bkes | |
Sales | $ 251,000 |
Variable manufacturing and selling expenses | $ 158,000 |
Contribution margin | $ 93,000 |
Fixed expenses: | |
Advertising, traceable | $ 20,400 |
Depreciation of special equipment | $ - |
Salaries of product-line managers | $ 37,000 |
Allocated common fixed expenses* | $ - |
Total fixed expenses | $ 57,400 |
Net operating income (loss) | $ 35,600 |
Answer 2
No.
Answer 3
Total | Dirt Bikes | Mountain Bikes | Racing Bkes | |
Sales | $ 925,000 | $ 268,000 | $ 406,000 | $ 251,000 |
Variable manufacturing and selling expenses | $ 477,000 | $ 111,000 | $ 208,000 | $ 158,000 |
Contribution margin | $ 448,000 | $ 157,000 | $ 198,000 | $ 93,000 |
Tracable Fixed expenses: | ||||
Advertising, traceable | $ 69,500 | $ 8,500 | $ 40,600 | $ 20,400 |
Salaries of product-line managers | $ 116,000 | $ 40,400 | $ 38,600 | $ 37,000 |
Net benefit | $ 262,500 | $ 108,100 | $ 118,800 | $ 35,600 |
Depreciation of special equipment | $ 44,400 | $ 21,000 | $ 7,400 | $ 16,000 |
Product line segment margin | $ 218,100 | $ 87,100 | $ 111,400 | $ 19,600 |
Common expenses | $ 185,000 | |||
Net operating income (loss) | $ 33,100 |
in case of any doubt, please comment.
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a...
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 $ 406,000 $ 257,000 Variable manufacturing and selling expenses 479,000 116,000 210,000 153,000 Contribution margin 453,000 153,000 196,000 104,000 Fixed expenses: Advertising, traceable 69,600 8,600 40,500 20,500 Depreciation of special equipment 42,900 20,400 7,200 15,300 Salaries of product-line managers 114,600...
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 $ 927,000 $ 269,000 $ 407,000 $ 251,000 Variable manufacturing and selling expenses 479,000 111,000 210,000 158,000 Contribution margin 448,000 158,000 197,000 93,000 Fixed expenses: Advertising, traceable 69,300 8,700 40,100 20,500 Depreciation of special equipment 44,000 20,200 8,000 15,800 Salaries of product-line managers 116,800...
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 $ 925,000 $ 266,000 $ 406,000 $ 253,000 Variable manufacturing and selling expenses 468,000 113,000 203,000 152,000 Contribution margin 457,000 153,000 203,000 101,000 Fixed expenses: Advertising, traceable 69,600 8,500 40,300 20,800 Depreciation of special equipment 43,500 20,600 7,400 15,500 Salaries of product-line managers 116,100...
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 $ 931,000 $ 267,000 $ 409,000 $ 255,000 Variable manufacturing and selling expenses 461,000 119,000 191,000 151,000 Contribution margin 470,000 148,000 218,000 104,000 Fixed expenses: Advertising, traceable 69,700 8,900 40,200 20,600 Depreciation of special equipment 43,100 20,300 7,200 15,600 Salaries of product-line managers 114,700...
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 $ 927,000 $ 269,000 $ 406,000 $ 252,000 Variable manufacturing and selling expenses 471,000 115,000 197,000 159,000 Contribution margin 456,000 154,000 209,000 93,000 Fixed expenses: Advertising, traceable 70,300 8,700 41,000 20,600 Depreciation of special equipment 43,900 20,900 7,500 15,500 Salaries of product-line managers 115,900...
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 $931,000 $268,000 $ 408,000 $ 255,000 Variable manufacturing and selling expenses 475,000 117,000 202,000 156,000 Contribution margin 456,000 151,000 206,000 99,000 Fixed expenses: Advertising, traceable 69,400 8,600 40,200 20,600 Depreciation of special equipment 43,900 20,100 7,800 16,000 Salaries of product-line managers 115,400 40,700 38,900...
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 $ 921,000 476,000 445,000 Dirt Bikes $263,000 114,000 149,000 Mountain Bikes $ 406,000 205,000 201,000 Racing Bikes $ 252,000 157,000 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 fixed expenses Total fixed expenses Net operating income...
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 $ 916,000 $ 262,000 $ 401,000 $ 253,000 Variable manufacturing and selling expenses 476,000 113,000 204,000 159,000 Contribution margin 440,000 149,000 197,000 94,000 Fixed expenses: Advertising, traceable 69,700 8,400 40,500 20,800 Depreciation of special equipment 44,100 20,700 7,700 15,700 Salaries of product-line managers 115,600...
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:
*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....
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 $ 937,000 $ 270,000 $ 409,000 $ 258,000 Variable manufacturing and selling expenses 463,000 111,000 194,000 158,000 Contribution margin 474,000 159,000 215,000 100,000 Fixed expenses: Advertising, traceable 70,200 8,600 40,800 20,800 Depreciation of special equipment 43,700 20,400 7,800 15,500 Salaries of product-line managers 115,800...