Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines.TotalsDirt BikesMountain Bikes Racing BikesContribution margin (loss)Traceable fixed expenses:Total traceable fixed expensesProduct line segment margin (loss)Net operating income (loss)< Required 2Required 3 >< Prev2 of 5Next >.... .....I The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales andexpenses for the past quarter follow:MountainRacing Bikes$ 60,00033,00027,000TotalDirt BikesBikesSales$ 300,000120,000180,000$ 90,00027,00063,000$ 150,00060,000Variable manufacturing and selling expensesContribution marginFixed expenses:Advertising, traceableDepreciation of special equipmentSalaries of product-line managersAllocated common fixed expenses*Total fixed expenses90,00010,0006,00012,00018,00014,0009,00013,00030,00066,0006,0008,00010,00012,00036,00030,00023,00035,00060,000148,00046,000Net operating income (loss)$ 32,000$ 17,000$ 24,000$ (9,000)*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 notthe line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.Aloxt

An income statement is a financial report that indicates the revenue and expenses of a business. It…

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: Mountain Racing Bikes $ 60,e00 33, еее Bikes Total $ 300,000 120,000 180, e00 Dirt Bikes 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 $ 90,000 27,000 63,000 $ 150,eeе 60,000 90,000 27,000 30,000 23,000 35,000 60,000 10,e00 6,000 12,000 18,000 46,000 14, еее 9,000 13,000 30,e00 66,000 6,000 8,e00 10, e00 12,еее 36, еее $ (9,000) 148,e00 Net operating income (loss) $ 32,000 $ 17,000 $ 24,000 "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.

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: Mountain Racing Bikes $ 60,e00 33, еее Bikes Total $ 300,000 120,000 180, e00 Dirt Bikes 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 $ 90,000 27,000 63,000 $ 150,eeе 60,000 90,000 27,000 30,000 23,000 35,000 60,000 10,e00 6,000 12,000 18,000 46,000 14, еее 9,000 13,000 30,e00 66,000 6,000 8,e00 10, e00 12,еее 36, еее $ (9,000) 148,e00 Net operating income (loss) $ 32,000 $ 17,000 $ 24,000 "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.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 39P

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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: Dirt Mountain Bikes Racing Bikes Total Bikes $ 923, e00 $263,000 $ 467, e00 456, e00 Sales 409, 090 $ 251,880 197,000 212,000 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 115,000 148,000 155,000 96,000 69, 300 42, 700 114, 600 184, 600 411, 200 $ 44,800 $ 26, 300 $ 8,500 20,300 40, 300 52,600 121,700 40,200 7,200 38,500 81,800 167,700 20, 600 15,200 35,800 50, 200 121, 800 44,300 $(25, 808) Net operating income (loss) *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…
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 Racing Bikes Mountain Total Bikes Bikes Sales Varlable manufacturing and selling expenses $300,000 $90,000 $150,000 $60,000 120,000 27,000 60,000 33,000 ......... Contribution margin.. 180,000 63,000 90,000 27,000 Fxed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers. Allocated common fixed expenses Total foxed expenses.. Net operating income (loss) .. 10,000 6,000 30,000 23,000 36,000 60,000 14,000 9,000 13,000 30,000 6,000 8,000 10,000 12,000 12,000 18,000 148,000 46,000 66,000 36,000 32,000 $17.000 24,000 (0.000) "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…
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 $ 265,000 $ 402,000 $ 258,000 Variable manufacturing and selling expenses 466,000 111,000 195,000 160,000 Contribution margin 459,000 154,000 207,000 98,000 Fixed expenses: Advertising, traceable 69,000 8,200 40,500 20,300 Depreciation of special equipment 43,200 20,100 7,700 15,400 Salaries of product-line managers 114,400 40,400 38,900 35,100 Allocated common fixed expenses* 185,000 53,000 80,400 51,600 Total fixed expenses 411,600 121,700 167,500 122,400 Net operating income (loss) $ 47,400 $ 32,300 $ 39,500 $ (24,400) *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 Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales an expenses for the past quarter follow: Mountain Bikes Racing Bikes Total Dirt Bikes $ 929,000 470,000 $ 266,000 113,000 153,000 $ 409,000 203,000 $ 254,000 154,000 100,000 Sales Variable manufacturing and selling expenses Contribution margin 459,000 206,000 ok Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses 70,000 43,700 114,500 185,800 414,000 9,000 20,400 40,500 53,200 123,100 40,800 7,800 38,700 81,800 169,100 20,200 15,500 35,300 50,800 nt 121,800 Net operating income (loss) $ 45,000 $ 29,900 $36,900 $ (21,800) "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…
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 $ 269,000 $ 405,000 $ 252,000 Variable manufacturing and selling expenses 468,000 111,000 206,000 151,000 Contribution margin 458,000 158,000 199,000 101,000 Fixed expenses: Advertising, traceable 69,800 8,800 40,700 20,300 Depreciation of special equipment 43,700 20,400 7,400 15,900 Salaries of product-line managers 114,200 40,700 38,400 35,100 Allocated common fixed expenses* 185,200 53,800 81,000 50,400 Total fixed expenses 412,900 123,700 167,500 121,700 Net operating income (loss) $ 45,100 $ 34,300 $ 31,500 $ (20,700) *Allocated on the basis of sales dollars. Management is considering discontinuing the racing bikes. The special equipment used to produce racing bikes has no resale value and does not wear out. Required:…
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 DirtBikes Mountain Bikes RacingBikes Sales $ 928,000 $ 265,000 $ 403,000 $ 260,000 Variable manufacturing and selling expenses 460,000 112,000 197,000 151,000 Contribution margin 468,000 153,000 206,000 109,000 Fixed expenses: Advertising, traceable 70,000 8,800 40,300 20,900 Depreciation of special equipment 43,600 20,800 7,600 15,200 Salaries of product-line managers 115,900 40,900 38,900 36,100 Allocated common fixed expenses* 185,600 53,000 80,600 52,000 Total fixed expenses 415,100 123,500 167,400 124,200 Net operating income (loss) $ 52,900 $ 29,500 $ 38,600 $ (15,200) *Allocated on the basis of sales dollars. Management is…
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 $ 929,000 $ 269,000 $ 407,000 $ 253,000 Variable manufacturing and selling expenses 468,000 115,000 196,000 157,000 Contribution margin 461,000 154,000 211,000 96,000 Fixed expenses: Advertising, traceable 70,200 9,000 40,500 20,700 Depreciation of special equipment 43,500 20,500 7,300 15,700 Salaries of product-line managers 114,500 40,200 38,400 35,900 Allocated common fixed expenses* 185,800 53,800 81,400 50,600 Total fixed expenses 414,000 123,500 167,600 122,900 Net operating income (loss) $ 47,000 $ 30,500 $ 43,400 $ (26,900) *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.…
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 DirtBikes Mountain Bikes RacingBikes Sales $ 922,000 $ 269,000 $ 403,000 $ 250,000 Variable manufacturing and selling expenses 477,000 110,000 209,000 158,000 Contribution margin 445,000 159,000 194,000 92,000 Fixed expenses: Advertising, traceable 69,800 9,000 40,400 20,400 Depreciation of special equipment 43,400 20,500 7,500 15,400 Salaries of product-line managers 115,800 40,700 38,400 36,700 Allocated common fixed expenses* 184,400 53,800 80,600 50,000 Total fixed expenses 413,400 124,000 166,900 122,500 Net operating income (loss) $ 31,600 $ 35,000 $ 27,100 $ (30,500) *Allocated on the basis of sales dollars. Management is…
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. Dire Bikes Bikes $ 921, 000 s265,0 s 404,000 S 252,000 Hountain Racing Bikes Total sales variable manufacturing and selling expenses 447,000 150,e0 16,0 contribution nargin Fixed expenses: Advertising, traceable Depreciation of special equipnent salaries of product-1ine managers Allocated comnon fixed expenses Total fixed exxpenses 101,000 8,900 44,00e 20,see 114,300 40,100 184, 200 53,800 412,Gee 1 00 40,400 7,500 38,100 se, see 166,s00 122,600 24,400 $ 26,100 S 29,200 $(21,600) 20,00 16,00e 35,400 50,400 70,100 Net operating 1ncone (loss) "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…
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 DirtBikes Mountain Bikes RacingBikes Sales $ 924,000 $ 268,000 $ 400,000 $ 256,000 Variable manufacturing and selling expenses 464,000 116,000 195,000 153,000 Contribution margin 460,000 152,000 205,000 103,000 Fixed expenses: Advertising, traceable 68,800 8,200 40,500 20,100 Depreciation of special equipment 43,000 20,300 7,300 15,400 Salaries of product-line managers 115,000 40,100 38,700 36,200 Allocated common fixed expenses* 184,800 53,600 80,000 51,200 Total fixed expenses 411,600 122,200 166,500 122,900 Net operating income (loss) $ 48,400 $ 29,800 $ 38,500 $ (19,900)…
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 $ 932,000 471,000 461,000 Dirt Bikes $ 265,000 118,000 147,000 69,700 44,000 115,700 186,400 415,800 $ 45,200 Mountain Bikes 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) *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. $ 408,000 200,000 208,000 Racing Bikes $ 259,000 153,000 106,000 9,000 40,300 20,400 20,900 8,000 15,100 40,700 38,400 36,600 53,000 81,600 51,800…
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: Dirt Mountain Racing Bikes $ 300,000 $ 90,000 $ 150,000 $ 60,000 Sales Total Bikes Bikes 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 120,000 180,000 27,000 63,000 60,000 90,000 33,000 27,000 30,000 23,000 35,000 60,000 148,000 $ 32,000 $ 17,000 $ 24,000 $ (9,000) 10,000 6,000 12,000 14,000 9,000 13,000 30,000 66,000 6,000 8,000 10,000 12,000 36,000 18,000 46,000 Net operating income (loss) *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…