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. 2.14 points eBook Hint Print Referenc Dirt Mountain Racing Total Bikes Bikes Bikes Sales $925,000 $264,000 $407,000 $ 254,000 Variable manufacturing 471,000 116,000 196,000, and selling 159,000 expenses Contribution margin 454,000 148,000 211,000 95,000 Fixed expenses: Advertising, traceable 68,800 8,100 40,200 20,500 Depreciation of special 44,000 20,300 7,900 15,800 equipment Salaries of product- line 115,400 40,400 38,600 36,400 managers Allocated common 185,000 fixed 52,800 81,400 50,800 expenses Total fixed 413,200 121,600 168,100 expenses 123,500 Me 2 expenses Net operating $ 40,800 $ 26,400 $ 42,900 $(28,500) income (loss) 2.14 points *Allocated on the basis of sales dollars. eBook 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. Hint Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the racing Print 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 Referenci to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Requi... Requi... Requi... What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Show less Financial advantage 285.00 per quarter Mc G 2 *Allocated on the basis of sales dollars. 2.14 points 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 eBook Hint 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. Print Complete this question by entering your answers in the Referenci tabs below. Requi... Requi... Requi... 2 Should the production and sale of racing bikes be discontinued? Yes No K Required 1 Required 3 > 2 2.14 points Complete this question by entering your answers in the tabs below. Requi... Requi... Requi... 2 eBook Hint 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. Show less Dirt Mountain Racing Totals Bikes Bikes Bikes Print 0 Reference Contribution margin (loss) Traceable fixed expenses 0 0 0 0 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 $ 0 $ 0$ 0 $ Net operating income 0 (loss)