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   $ 266,000   $ 409,000   $ 252,000   Variable manufacturing and selling expenses   471,000     111,000     202,000     158,000   Contribution margin   456,000     155,000     207,000     94,000   Fixed expenses:                         Advertising, traceable   70,200     8,900     40,800     20,500   Depreciation of special equipment   44,100     20,600     8,000     15,500   Salaries of product-line managers   114,600     40,400     38,400     35,800   Allocated common fixed expenses*   185,400     53,200     81,800     50,400   Total fixed expenses   414,300     123,100     169,000     122,200   Net operating income (loss) $ 41,700   $ 31,900   $ 38,000   $ (28,200)       *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. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. 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.

Bedtime Bedding Company manufactures pillows. The Cover Division makes covers and the Assembly Division makes the finished products. The covers can be sold separately for $5.00. The pillows sell for $6.00. The information related to manufacturing for the most recent year is as follows:   Cover Division manufacturing costs $6,000,000 Sales of covers by Cover Division 4,000,000 Market value of covers transferred to Assembly 6,000,000 Sales of pillows by Assembly Division 7,200,000 Additional manufacturing costs of Assembly Division 1,500,000   Compute the operating income for each division and the company as a whole. Use market value as the transfer price. Are all managers happy with this concept? Explain

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 Variable manufacturing and selling expenses Contribution margin Fixed expenses: Total $ 917,000 460,000 457,000 Dirt Bikes $ 264,000 111,000 153,000 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. 70,000 44,400 115,700 183,400 413,500 $ 43,500 Required 1 38,700 80,400 167,800 $ 43,200 Racing Bikes $ 251,000 158,000 93,000 20,600 15,600 36,400 50, 200 122,800 $ (29,800)

Muscle Beach, Inc., makes three models of high-performance weight-training benches. Current operating data are summarized here: MegaMusclePowerGymProForceSelling price per unit$141 $194 $281 Contribution margin per unit 42  76  57 Monthly sales volume—units 3,030  2,010  1,080 Fixed expenses per month  Total of $315,600Calculate the contribution margin ratio of each product b. Calculate the firm's overall contribution margin ratio. c. Calculate the firm's monthly break-even point in sales dollars. d. Calculate the firm's monthly operating income. e-1. Management is considering the elimination of the ProForce model due to its low sales volume and low contribution margin ratio. As a result, total fixed expenses can be reduced to $263,850 per month. Assuming that this change would not affect the other models, what would be the effect on net operating income. f-1. Assume the same facts as in requirement e-1. Assume also that the sales volume for the PowerGym model will increase by 492…

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   $ 261,000   $ 408,000   $ 259,000   Variable manufacturing and selling expenses   457,000     115,000     191,000     151,000   Contribution margin   471,000     146,000     217,000     108,000   Fixed expenses:                         Advertising, traceable   70,400     8,600     40,800     21,000   Depreciation of special equipment   42,700     20,100     7,200     15,400   Salaries of product-line managers   115,800     40,100     38,800     36,900   Allocated common fixed expenses*   185,600     52,200     81,600     51,800   Total fixed expenses   414,500     121,000     168,400     125,100   Net operating income (loss) $ 56,500   $ 25,000   $ 48,600   $ (17,100)       *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: 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. Total Dirt Bikes $ 920,000 469,000 451,000 $ 266,000 111,000 155,000 Mountain Bikes $ 402,000 200,000 Racing Bikes $ 252,000 158,000 202,000 94,000 69,200 8,400 40,400 20,400 44,000 21,000 7,700 15,300 114,700 40,300 38,600 35,800 184,000 53,200 80,400 50,400 411,900 122,900 167,100 121,900 $ 39,100 $ 32,100 $ 34,900 $ (27,900) 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: 1. What is the financial advantage…

Witt Recreation Company (WRC) makes e-bikes. The company currently manufactures two models, the Coaster and the Traveler, in one of the WRC factories. Both models require the same assembling operations. The difference between the models is the cost of materials. The following data are available for the second quarter. Number of bikes assembled Coaster 750 Traveler 450 Total 1,200 Materials cost per bike Other costs: $ 638 $ 1,214 $ 313,800 396,800 261,800 354,800 Direct labor Depreciation and lease Supervision and control Factory administration Required: Witt Recreation Company uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in the second quarter. Note: Do not round intermediate calculations. Round your final answers to nearest whole number. Operation cost Materials cost Total cost Unit cost Coaster Traveler Total $ 0

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 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. Total $ 917,000 470,000 447,000 70,400 43,500 114,500 183,400 411,800 $ 35,200 Dirt Bikes $ 265,000 116,000 149,000 8,700 20,300 40,100 53,000 122,100 $ 26,900 Mountain Bikes $ 400,000 202,000 198,000 40,800 7,800 38,200 80,000 166,800 $ 31,200 Racing Bikes $ 252,000 152,000 100,000 Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 20,900 15,400 36,200 50,400 122,900 $ (22,900) Management is concerned…

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Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 1,800 units):          Direct materials $ 27   Direct labor   104   Variable overhead   19   Fixed overhead   44   Total $ 194       Trailblazers has offered to sell the assembly to Mobility for $166 each. The total order would amount to 1,800 rear wheel assemblies per year, which Mobility's management will buy instead of make if Mobility can save at least $20,000 per year. Accepting Trailblazers's offer would eliminate annual fixed overhead of $40,050. Required: a. Prepare a schedule that shows the total differential costs. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no…