DLIt Mountain Kacing Bikes Total Bikes Bikes Sales Variable manufacturing and selling $920,000 $267,000 $400,000 $ 253,000 154,000 477,000 115,000 208,000 expenses Contribution margin Fixed expenses: 443,000 152,000 192,000 99,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 69,300 44,400 20,900 8,600 40,200 7,700 114,100 40,200 38,600 184,000 53,400 80,000 411,800 123,100 166,500 20,500 15,800 35,300 50,600 122,200 28,900 $ 25,500 $ (23,200) Total fixed expenses Net operating income (loss) $ 31,200 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 wean 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 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial (disadvantage) per quarter 31,200