2 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: 1.87 points Sluipped Dirt Mountain Racing Total Bikes Bikes Bikes $ 921,000 $264, 000 $ 404,00 $ 253,000 480,000 116,000 284,600 168,000 441,000 148,000 200,000 93.900 Sales Variable sanufacturing and seling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product line managers Allocated common fixed expenses Total fixed expenses Net operating Income (loss) Book 70,200 8,700 40,880 20, 700 44,000 21.000 7,700 15,30 113,700 40, 490 38,300 35,000 184,200 52,800 80, 880 50. Gee 412, 190 122,980 167,600 121,500 $ 28,000 $25,100 $ 32, 400 $(28,500) References 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 property tomated segmented income statement that would be more uterul 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 2 Required 3 Me Assignment-required Seved "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 non 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, Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2017 19 Dikes 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 manage profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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. Totals Dirt Bike Mountain Bikes Racing Bikes Contribution margin oss) Traceable fwed expenses Total traceable foxed expenses Product Ine segment margin (1) Net Operating income Boss