Book 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: Mountain Bikes Racing Bikes 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) "Allocated on the basis of sales dollars. Total $ 929,000 Dirt Bikes 477,000 $ 267,000 117,000 $ 408,000 $254,000 200,000 160,000 452,000 150,000 208,000 94,000 68,700 8,200 40,200 20,300 43,700 20,400 7,500 15,800 115,700 40,800 38,700 36,200 185,800 53,400 81,600 50,800 413,900 122,800 168,000 123,100 $ 38,100 $27,200 $ 40,000 $ (29,100) 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 Management is concerned about the continued losses shown by the racing bikes and wants a r the line should be discontinued. The special equipment used to produce racing bikes has no re 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 man- 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 2 > 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 mar profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 equired 3 Should the production and sale of racing bikes be discontinued? Yes No C APR Prev 1 of 5 Next > OnLabity of the various producties. Saved Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing th 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