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please provide work shown, thank you! The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data
please provide work shown, thank you!
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 Dirt Bikes Bikes Racing Bikes Sales $ 920,000 $ 267,099 $ 403,000 Variable manufacturing and selling expenses $ 250,000 465,000 116,000 192,000 157,000 Contribution margin 455,000 151,000 211,000 93,000 Fixed expenses: Advertising, traceable 69,700 8,600 40,800 20, 380 Depreciation of special equipment 44,300 20,800 7,900 15,600 Salaries of product-line managers 115,100 40,100 38,400 36,600 Allocated common fixed expenses 184,000 53,400 80,600 50,000 Total fixed expenses 413, 100 122,989 167,700 122,500 Net operating income (loss) $ 41,900 $ 28,100 $ 43,300 $ (29,500) "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 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. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes Step by Step Solution
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