8.75 points eBook Hint 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: Sales Variable manufacturing and selling 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) Total Dirt Mountain Racing Bikes Bikes Bikes $915,000 $262,000 $401,000 $252,000 463,000 113,000 199,000 151,000 452,000 149,000 202,000 101,000 8,500 40,700 69,700 20,500 44,100 21,000 7,900 15,200 114,100 40,600 38,000 35,500 183,000 52,400 80,200 50,400 410,900 122,500 166,800 121,600 $ 41,100 $ 26,500 $35,200 $(20,600) Print "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. Required 1 Required 2 Required 3 Hint Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1 Required 2 > Print 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 ONO < Required 1 Required 3 > 5 Complete this question by entering your answers in the tabs below. Required 1 Book Required 2 Required 3 $ Hint Print 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. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes >