Exercise 15-2 (Static) Dropping or Retaining a Segment[LON-21 The Regal Cycie Comores types of data wewe Store pastoor . TAL rescue . 1. Carin S. . 2. W 2 TI Metrece . Direct 18.00 14. . Salaries af art 21.08 . Alcatel 15. 12 . 17. re 3. Alcated on the bottom Management is contrado entre tots the thould become the used to demand Required 1. What is the financial pentru 2 Shad the production co portementen bre Complete the wine the down Exercise 11-2 (Static) Dropping or Retaining a Segment (L011-2) The Regal Cycle Company manufactures three types of bicycles-art bike a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow Mountain Total Dirt Bikes Sales Bikes Racing Bikes 300,000 $ 90,000 $ 150,00 Variable manufacturing and selling expenses 5 60,000 120.000 27,000 50.000 33.000 Contribution margin 160.000 90.00 Fixed expenses Advertising. traceable 30, see 10,000 14,000 6,00 Depreciation of special equipment 23,000 6,000 9,000 8,00 Salaries of product-Line Danagers 35.00 12,000 13,000 10,000 Allocated common fixed expenses. 60.000 18,000 30.000 12,00 Total fixed expenses 140,000 45.000 66. 16,00 Net operating income toss 5 32.600 $ 17.000 3:24,000 $ 19,000) "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 property 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 7 Required What is the financial advantage disadvantage) per quarter of discontinuing the Racing Bikes