Never use plagiarized sources. Get Your Original Essay on
Question: The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a …
Hire Professionals Just from $11/Page
Order Now Click here
Question: The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a ...
Question: The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a ...
Question: The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a ...

Show transcribed image text 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 Dirt Racing Total Bikes Bikes Bikes Sales 934,000 266,000 409,000 259,000 Variable manufacturing and selling expenses 471,000 118,000 197,000 156,000 Contribution margin 463,000 148,000 212,000 103,000 Fixed expenses: Advertising, traceable 69,100 43,700 20,600 114,900 40,600 8.200 40,700 20,200 Depreciation of special equipment 7,300 15,800 38,300 36,000 81,800 51,800 Salaries of product-line managers Allocated common fixed expenses 186,800 53,200 Total fixed expenses 414,500 122,600 168,100 123,800 Net operating income (loss) 48,500 25,400 43,900 (20,800) "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 racing bikes has no resale value and does not wear out. Required: 1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.)

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 Dirt Racing Total Bikes Bikes Bikes Sales 934,000 266,000 409,000 259,000 Variable manufacturing and selling expenses 471,000 118,000 197,000 156,000 Contribution margin 463,000 148,000 212,000 103,000 Fixed expenses: Advertising, traceable 69,100 43,700 20,600 114,900 40,600 8.200 40,700 20,200 Depreciation of special equipment 7,300 15,800 38,300 36,000 81,800 51,800 Salaries of product-line managers Allocated common fixed expenses 186,800 53,200 Total fixed expenses 414,500 122,600 168,100 123,800 Net operating income (loss) 48,500 25,400 43,900 (20,800) "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 racing bikes has no resale value and does not wear out. Required: 1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.)

Open chat
Lets chat on via WhatsApp
Hello, Welcome to our WhatsApp support. Reply to this message to start a chat.