1. Financial (disadvantage) per quarter: $-44200
Current Total | Total If Racing Bikes Are Dropped |
Difference: Financial advantage (disadvantage) |
|
Sales | 928000 | 673000 | -255000 |
Variable manufacturing and selling expenses | 480000 | 325000 | 155000 |
Contribution margin (loss) | 448000 | 348000 | -100000 |
Fixed expenses: | |||
Advertising, traceable | 69000 | 48400 | 20600 |
Depreciation on special equipment | 43400 | 43400 | 0 |
Salaries of product-line managers | 114300 | 79100 | 35200 |
Allocated common fixed expenses | 185600 | 185600 | 0 |
Total fixed expenses | 412300 | 356500 | 55800 |
Net operating income (loss) | 35700 | -8500 | -44200 |
2. No.
The production and sale of racing bikes should not be discontinued as it will result in a financial disadvantage.
3.
Segmented Income Statement | ||||
Totals | Dirt Bikes | Mountain Bikes | Racing Bikes | |
Sales | 928000 | 269000 | 404000 | 255000 |
Variable manufacturing and selling expenses | 480000 | 119000 | 206000 | 155000 |
Contribution margin (loss) | 448000 | 150000 | 198000 | 100000 |
Traceable fixed expenses: | ||||
Advertising | 69000 | 8300 | 40100 | 20600 |
Depreciation on special equipment | 43400 | 20700 | 7100 | 15600 |
Salaries of product-line managers | 114300 | 40300 | 38800 | 35200 |
Total traceable fixed expenses | 226700 | 69300 | 86000 | 71400 |
Segment operating income | 221300 | 80700 | 112000 | 28600 |
Common fixed expenses | 185600 | |||
Net operating income (loss) $ | 35700 |
Exercise The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and...
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 $928,000 $268,000 $407,000 $ 253,000 462,000 114,000 197,000 151,000 466,000 154,000 210,000 102,000 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 (loss) 69,600...
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 $ 928,000 $ 265,000 $ 410,000 $ 253,000 Variable manufacturing and selling expenses 463,000 118,000 191,000 154,000 Contribution margin 465,000 147,000 219,000 99,000 Fixed expenses: Advertising, traceable 69,700 8,400 40,700 20,600 Depreciation of special equipment 44,100 20,400 7,700 16,000 Salaries of product-line managers 114,700...
The Regal Cycle Company... 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: points Dirt Mountain Racing Total Bikes Bikes Bikes Bikes $928,000 $269,000 $ 403,000 $ 256,000 460,000 111,000 192,000 157,000 468,000 158,000 211,000 99,000 eBook 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*...
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 $ 922,000 $264,000 $ 405,000 $ 253,000 463,000 110,000 195,000 158,000 459,000 154,000 210,000 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: 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 $ 401,000 $ 260,000 Variable manufacturing and selling expenses 458,000 113,000 193,000...
he 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 $ 268,000 $ 401,000 $ 259,000 Variable manufacturing and selling expenses 467,000 113,000 203,000 151,000 Contribution margin 461,000 155,000 198,000 108,000 Fixed expenses: Advertising, traceable 69,600 8,500 40,700 20,400 Depreciation of special equipment 43,200 20,500 7,400 15,300 Salaries of product-line managers 115,800...
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 $933.000 465, 468,000 Dirt Bikes $266.00 116,eee 150.000 Mountain Bikes $40,000 192,eee 215, eee Racing Bikes $ 260,000 157, e8e 183, eee 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...
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:TotalDirtBikesMountain BikesRacingBikesSales$928,000$267,000$401,000$260,000Variable manufacturing and selling expenses458,000113,000193,000152,000Contribution margin470,000154,000208,000108,000Fixed expenses:Advertising, traceable70,0008,70040,90020,400Depreciation of special equipment43,10020,8007,20015,100Salaries of product-line managers114,80040,80038,90035,100Allocated common fixed expenses*185,60053,40080,20052,000Total fixed expenses413,500123,700167,200122,600Net operating income (loss)$56,500$30,300$40,800$(14,600)*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...
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. Sales Total $918, see 460, eee 458,000 Dirt Mountain Racing Bikes Bikes Bikes $265,000 $402,00 $ 251, eee 119,00 191,000 15e,eee 146,099 211,600 101,600 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...