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 $ 915,000 $ 264,000 $ 401,000 $ 250,000 variable manufacturing and selling expenses 465,000 113,000 194,000 158,000 contribution margin 450,000 151,000 207,000 92,000 fixed expenses: advertising, traceable 69,400 8,200 40,600 20,600 depreciation of special equipment 44,700 20,900 7,900 15,900 salaries of product-line managers 114,400 40,300 38,900 35,200 allocated common fixed expenses* 183,000 52,800 80,200 50,000 total fixed expenses 411,500 122,200 167,600 121,700 net operating income (loss) $ 38,500 $ 28,800 $ 39,400 $ (29,700) *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.

When the federal reserve buys bonds from or sells bonds to member banks, it is called monetary policy reserve ratio interest rate adjustment open market operations

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?

When a shortage or a surplus arises in the loanable funds market a. the supply of loanable funds changes to return the economy to its original real interest rate b. the nominal interest rate is pulled to the new equilibrium level c. the demand for loanable funds changes to return the economy to its original real interest rate d. the real interest rate is pulled to the new equilibrium level