Chapter 11 HW Sarved Help Save & Exit Submit 7 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 15 Dirt Mountain Racing Total Bike niken Bike $931,000 $269,000 5 402,000 $260.000 466,000 110,000 203,000 153,000 463.000 150.000 199.000 107.000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Mivertising, teaceable Depreciation of special guest salaries of product line manager Allocated on tiede Total fixed expenses Met operating income (10) 70.100 8.300 41.000 20,000 42.000 20,200 7.100 15,500 114,900 40,100 38,700 36,100 116,200 $3,000 39,400 12.000 20.000 OD 161,200 120100 $ 52,000 36.600 $ 31,800 $(17.400) "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 7. 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 15 points Complete this question by entering your answers in the tabs below. Skipped Required 1 Required 2 Required book What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Him Print Required 2 > 7 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 l- profitability of the various product lines. Complete this question by entering your answers in the tabs below. 15 points Skipped Required 1 Required Required 3 Book Should the production and sale of racing bikes be discontinued? Hint Yes ONO Print 7 Red 1 Required Required Prepare a property formatted segmented income statement that would be more useful to management in assessing the long- un profitability of the various product lines 95 po Totale Dirt Bikes Mountain Racing Contribution margin Tracested expenses 0 0 0 Total aceste despre Product line margina) 0 0 0 5 OS 05 0 5