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6 Check my work Exercise 11-2 (Algo) Dropping or Retaining a Segment [LO11-2) 5 The Regal Cycle Company manufactures three types of bicycles-adirt bike, a

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6 Check my work Exercise 11-2 (Algo) Dropping or Retaining a Segment [LO11-2) 5 The Regal Cycle Company manufactures three types of bicycles-adirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow Mountat Total sales Dit is BAS Variable facturing and selling expenses 1930.000 1.262.400 41,010 Contribution margin 461,900 3 252,000 111.900 195,00 155,000 Find opens 459.000 151.000 IKONO 97000 Atvertising, traceable 69,60 8,600 40,200 Depreciation of special que 43,500 20.300 20,600 salaries of product line managers 7.700 15,500 193,900 40,000 38.00 Allocated common fixed expen 35,00 184.000 52,400 01. 200 50.400 Total fixed expenses 411.000 121,300 162.100 132,000 Bet operating income foss) $ 48,000 5.29,700 $ 49,900 125.00 "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 Complete this question by entering your answers in the tabs below. ed 4.500L the production and sale of racing bikes be discontinued? 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 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? es Required Required 2 > 25 points Skod 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. co Hint Complete this question by entering your answers in the tabs below. Ask Print Required 1 Required 2 References Required 3 Should the production and sale of racing bikes be discontinued? OYes No Obility of the various product lines me statement that would be more useful to management in assessing the long run 25 bons Complete this question by entering your answers in the tabs below. Skipped Required 1 Required 2 Required 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 Totals Dirt Bikes Mountain Bike Racing Bikes Hint Ae Print References Contribution margin (los) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (s) Not operating income (loss)

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