es 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: Sales Variable manufacturing and selling expenses Contribution margin Total $ 931,000 476,000 455,000 Required 1 Dirt Bikes $ 265,000 118,000 147,000 Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses. Net operating income (loss) *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. 70,200 44,000 115,500 186,200 415,900 $ 39,100 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Mountain Bikes $ 407,000 204,000 203,000 8,600 20,800 40,600 53,000 123,000 $ 24,000 40,800 7,600 38,600 81,400 168,400 $ 34,600 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. Racing Bikes $ 259,000 154,000 105,000 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 20,800 15,600 36,300 51,800 124,500 $ (19,500)

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: "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. Whot 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. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? the line should be discontinued The sbecial equpment used to product racing bikes has no resale value and does not weer ove Aequired: 1. What is the financial advantage idsadvantage) ber quarter of disconthuing the Racing Blked? 2. Sheuld the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented incoene slatement that would be more useful to management in assessing the lsag run profitability of the various prodact lines. Complete this quention by entering your answers in the tabs below. Prepare a propenly formatted segmented income statement that woula be more csptul to management in assessing the isng-rin prefitabeif of the vanous product llines