17 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 0.47 points Total $ 925,000 468,000 457.000 Dirt Bikes $ 266,000 112.000 149,000 Mountain Bikes $ 401,000 192,000 209,000 Racing Bikes $ 258,000 159.000 99,000 eBook Salon Variable manufacturing and selling expennen Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating incone (los) 69,300 43,100 115,700 185.000 413.100 $ 43,900 8,300 20,300 40,000 53,200 122,500 $ 26,400 40,800 7,600 39,000 80200 167,600 $ 41,400 20,200 15,200 35,900 51,600 122, 900 $ (23.900) r Files "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 References Complete this question by entering your answers in the tabs below. Required: Required 2 Required Prepare a property formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. 17 Complete this question by entering your answers in the tabs below. 0.47 Required 1 Required 2 Required 3 points Prepare a property Formatted segmented Income statement that would be more useful to management in assessing the long-run profitability of the various product lines. eBook $ Totals Dirt Bikes Mountain Bikes Racing Bikes 925,000 $ 266,000 $ 401,000 $ 258,000 468,000 117,000 192.000 159,000 457,000 149,000 209,000 99,000 Hint Flies Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable faced expenses Advertising, traceable Depreciation of special equipment Salaries of the product line managers Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (ons) 8,300 20,300 40,800 7,600 20.200 15,200 Print 69,300 43,100 115,700 228,100 228,900 $ 185.000 43,900 28,600 120,400 $ 48.400 160,600 $ 35,400 23,600 References $