Dirt Mountain Racing Total Bikes Bikes Bikes $929,000 $266,000 $ 406,000 $ 257,000 478,080 111,000 289,000 158,000 451,080 155,000 197,000 99,000 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) 69,400 8,200 40,200 21,000 43,699 20,108 7,700 15,800 115,900 40,900 38,800 36,200 185,800 53,200 B1,200 51,400 414, 780 122,400 167,900 124,400 5 36,300 $ 32,688 $ 29,100 $(25,408) "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? Financial (disadvantage) per quarter 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 Bikes Racing Bikes 0 0 Contribution margin (loss) Traceable foxed expenses Oh 0 Total traceable foxed expenses 0 0 0 0 0 Product line segment margin (loss) $ 0 $ 0 $ 0 Net operating income (loss) $ 0