#1,2,3

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 Total Bikes Bikes Bikes Sales $933,000 $269,000 $405,800 $ 259,000 Variable manufacturing and 474,000 116,000 207,000 151,00 selling expenses Contribution margin 459,888 153, 080 198,000 188,800 Fixed expenses: Advertising, traceable 69,900 8,700 40,500 20,700 Depreciation of 43,800 20,200 special equipment 7,800 15,800 Salaries of product-line 115,400 40,888 38,500 36, 10e managers Allocated common fixed expenses 186,600 53,800 B1, eee 51,880 Total fixed expenses 415,780 123,500 167,800 124,400 Net operating income $ 43,300 $ 29,500 $ 30,200 $(16,480) (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. Required: What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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 Complete this question by entering your answers in the tabs below. Required Required Required 2. 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 Racing Bikes Bikes Contribution margin (loss) Traceable foxed expenses Total traceable fixed expenses Product line segment margin (loss) Not operating income (105)