Check my work 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: Dirt Mountain Bikes cing Total Bikes Bikes $ 919,000 $265,000 400,000 $ 254,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: 467,000 117,000 198,000 152,000 -702.000102,000 452,000 148,000 202, 000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 69,600 8,200 40,500 20,900 7,700 15,400 35,800 183,800 53,000 80,000 50,800 43,800 20,700 115,000 41,000 38,200 Total tised espenas12 200 12,.90 186,00 124,20 Total fixed expenses Net operating income (loss) s 39,800 25,100 $35,600 $ (20,900) 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 racina bikes he discontinued? Check my work 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 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1
