1.what is the financial advantage per quarter of discontinuing racing bikes ?
2. should the production and sale of racing bikes be discontinued?
Extracted text: 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) < prev="" 2="" of="" 20="" next=""> DELL home end insert prt sc
Extracted text: Mountain Bikes Total Dirt Bikes Racing Bikes Sales $ 918,000 467,000 $ 261,000 111, 000 150,000 $ 403,000 203,000 200,000 $ 254,000 153,000 101,000 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 451,000 69,700 43,700 115,700 183,600 412,700 8,600 20,700 40, з0 52,200 121,800 $ 28, 200 40,400 7,700 38,600 80,600 167,300 20,700 15,300 36,800 50,800 123,600 $ (22,600) Net operating income (loss) $ 38,300 $ 32,700 *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. < prev="" 2="" of="" 20="" next=""> DELL DII prt sc home end insert de F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 F12 レ