As per HOMEWORKLIB POLICY one question should be posted at a time, please post other question separately. Here answering the first question below:
1 | Current Total | Total if racing bikes are dropped | Difference: Net operating income increase or (decrease) | ||
Sales | $ 9,20,000 | $ 6,68,000 | $ -2,52,000 | ||
Variable manufacturing and selling expenses | $ 4,75,000 | $ 3,16,000 | $ 1,59,000 | ||
Contribution margin (loss) | $ 4,45,000 | $ 3,52,000 | $ -93,000 | ||
Fixed expenses: | |||||
Advertising, traceable | $ 70,400 | $ 49,500 | $ 20,900 | ||
Depreciation on special equipment | $ 43,800 | $ 43,800 | $ - | ||
Salaries of product managers | $ 1,15,200 | $ 79,700 | $ 35,500 | ||
Allocated common expense | $ 1,84,000 | $ 1,84,000 | $ - | ||
Total fixed expenses | $ 4,13,400 | $ 3,57,000 | $ 56,400 | ||
Net operating income (loss) | $ 31,600 | $ -5,000 | $ -36,600 | ||
2 | No | ||||
Discontinuation of Production and sale of racing bikes will incur more loss than existing loss from the unit | |||||
3 | Total | Dirt Bikes | Mountain Bikes | Racing Bikes | |
Sales | $ 9,20,000 | $ 2,64,000 | $ 4,04,000 | $ 2,52,000 | |
Variable manufacturing and selling expenses | $ 4,75,000 | $ 1,17,000 | $ 1,99,000 | $ 1,59,000 | |
Contribution margin (loss) | $ 4,45,000 | $ 1,47,000 | $ 2,05,000 | $ 93,000 | |
Traceable Fixed expenses: | |||||
Advertising, traceable | $ 70,400 | $ 8,800 | $ 40,700 | $ 20,900 | |
Depreciation on special equipment | $ 43,800 | $ 20,100 | $ 7,800 | $ 15,900 | |
Salaries of product managers | $ 1,15,200 | $ 40,800 | $ 38,900 | $ 35,500 | |
Total traceable fixed expenses | $ 2,29,400 | $ 69,700 | $ 87,400 | $ 72,300 | |
Product line segment margin (loss) | $ 2,15,600 | $ 77,300 | $ 1,17,600 | $ 20,700 | |
Allocated common fixed expense | $ 1,84,000 | ||||
Net operating income (loss) | $ 31,600 |
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a...
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 $ 926,000 $ 263,000 $ 409,000 $ 254,000 Variable manufacturing and selling expenses 480,000 114,000 207,000 159,000 Contribution margin 446,000 149,000 202,000 95,000 Fixed expenses: Advertising, traceable 69,400 8,300 40,600 20,500 Depreciation of special equipment 43,400 20,500 7,500 15,400 Salaries of product-line managers...
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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 $ 267,000 $ 400,000 $ 258,000 Variable manufacturing and selling expenses 468,000 118,000 200,000 150,000 Contribution margin 457,000 149,000 200,000 108,000 Fixed expenses: Advertising, traceable 69,700 8,200 40,600 20,900 Depreciation of special equipment 43,400 20,200 7,300 15,900 Salaries of product-line managers 113,500...
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