Please answer question 1 and 3, thank you!
Exercise 12-2 Dropping or Retaining a Segment (L012-2] 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. Sales Variable manufacturing and selling expenses Contribution margin Pixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) Dirt Mountain Racing Total Bikes Bikes Bikes $ 928,000 $267,000 $ 407,000 $ 254,000 464,000 111,000 193,000 160,000 464,000 156,000 214,000 94,000 69,600 8,500 40,700 20,400 43,600 20,900 7,500 15,200 113,500 40,200 38,100 35,200 185,600 53.400 81,400 50.800 412,300 123,000 167,700 121,600 $ 51,700 $ 33,000 $ 46,300 $(27,600) nces "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. 1 Total tixed expenses Het operating income (loss) 412,300 123,000 167,700 121,600 $ 51,700 $ 33,000 $ 46,300 $(27,600) "Allocated on the basis of sales dollars. 60 points eBook 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 a cessing the long-run profitability of the various product lines. Hint Print References 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? Required 2 > ME Gew Prex 1 of 4 !!! Next > Macbook Ain Help Save & E ter 12 - Homework (Algorithmic 2) - Drop Segment Ches 1 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 to 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 -Book Hint 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. Print Serences Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (los) Traceable faced expenses Total traceable forced expenses Product line segment margin (loss) Net operating income (los)
