my won Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2) 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: Mountain Total Racing Bikes Dirt Bikes Bikes Sales $ 929,000 $ 270,000 $ 404,000 $ 255,000 Variable manufacturing and selling expenses 472,000 115,000 200,000 152,000 Contribution margin 457,000 155,000 204,000 98.000 Fixed expenses: Advertising, traceable 69,000 8,500 40,300 20,200 Depreciation of special equipment 44,200 20,800 Salaries of product-line managers 7,700 15,700 114,800 40,200 39,000 35,600 Allocated common fixed expenses 185,800 54,000 80,800 $1,000 Total fixed expenses 413,800 123,500 167.800 122,500 Net operating income (los) $ 43,200 $ 31,500 $36,200 $ (24,500) *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 2 Required 3 Check my Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 114,800 185,800 413,800 $ 43,200 40,200 54,000 123,500 $ 31,500 39,000 80, 800 167,800 $ 36,200 35,600 51,000 122,500 $ (24,500) 307 *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 valu 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 th 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