Chap 11 GRADED Homework 1 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: 20 Total Dirt Bikes Mountain Bikes Racing Bikes points Sales $ 928,000 Variable manufacturing and selling expenses Contribution margin 468,000 460,000 $ 269,000 119,000 150,000 $ 402,000 195,000 207,000 $ 257,000 154,000 103,000 Fixed expenses: eBook Advertising, traceable Depreciation of special equipment Salaries of product-line managers. 69,000 8, 200 40, 300 20, 500 43, 900 20, 500 7, 700 15, 700 116, 200 40, 400 38, 900 36, 900 101 Hint Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. 185, 600 414, 700 53,800 122, 900 80, 400 167, 300 $ 45,300 $ 27,100 $ 39, 700 51,400 124, 500 $ (21,500) Print References 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 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? < Required 1 Required 2 >