Racing The Regal Cycle Company manufactures three types of bicycle-a dut bike a mountain bike, and a racing bike Dots on sales and expenses for the past quarter follow Di Mountain Tota Bikes Bikes Bikes Sales 5 920,000 $262,00 $ 482,000 5 256,000 Variable manufacturing and selling expenses 471,00 117,000 190,000 156.000 Contribution margin 449,000 145,000 200,000 100,000 Fixed expenses: Advertising, traceable 70,500 3,000 0.900 20,000 Depreciation of special equipment 44.000 29,200 7.900 15.900 Salaries of product line managers 116, 100 40,100 38,000 36,000 Allocated common fixed expenses 164.000 $2.00 30,400 $1,200 Total nedenses 412, 600121.500 167,200 123) 900 Net operating incon (loss $36,400 $ 23,500 $ 36,590 5023,900) Allocated on the basis of sales dolom Management is concerned about me continued losses shown by the racing bites and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce Yacing bikes honoresale value and does not wear out Required: 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 segmente income statement that would be more to management sessing the long run profitability of the various product lines 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 (disadvantages 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 Required 2 Required What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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 Required 2 Required should the production and sale of racing bikes be discontinued Yes NO Requirea: 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 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. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 Contribution margin (105) Traceable foed expenses 0 0 0 0 Total traceable bud ecenses Product line segment margin (los) 0 5 OS DS 0 Net Operating income (1) 5
