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Dirt Mountain Racing Total Bike Bikes Bikes $ 923,000 $266,000 $401,000 $ 256,000 476,000 120,000 199,000 157,000 447,000 146,000 202,000 99,000 Sales Variable manufacturing and

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Dirt Mountain Racing Total Bike Bikes Bikes $ 923,000 $266,000 $401,000 $ 256,000 476,000 120,000 199,000 157,000 447,000 146,000 202,000 99,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-1ine managers Allocated common fixed expenses Total fixed expenses Net operating income (lon) 69,800 8,400 40,600 20,800 43,800 20,700 7,200 15,900 114,700 40,900 38,100 35,700 184,600 53,200 80,200 51,200 412,900 123,200 166,100 123,600 # 34,100 $ 22,800 $ 35,900 $(24,600) "Allocated on the basis of sales dollars. Management is concemed 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. require. 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. ok nt Required 1 Required 2 Required 3 int What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? ences Required: Required 2 > Required 1 Required 2 Required 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. Totals Dirt Bikes Mountain Bike Racing Bikes 0 0 0 Contribution margin (los) Traceable fixed expenses: 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 0 $ 0 0 0 $ 0$ Net operating income (loss) 0

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