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Hw Saved Help Save&Exit Submit Check my work The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing

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Hw Saved Help Save&Exit Submit Check my work 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 Dirt Mountain R Bikes acing Bikes Total Bikes Sales Variable manufacturing and selling 924,000 $267,000 $403,000$ 254,000 464,000 118,000 194,000 152,000 expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 460 000149.000 209,000 102,000 69,6008,600 40,200 20,800 42,600 20,300 7,2005,100 114,200 40,000 38,700 35,500 184.80053,400 80,60050,800 es Total fixed expenses Net operating income (loss) 411,200 122,300 166,700 122,200 $ 48,800 26,700 42,300 $(20,200) 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 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 K Prev 4 of 8 Next>

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