S 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 Total $ 930,000 461,000 469,000 Required 1 Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *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. Complete this question by entering your answers in the tabs below. Required 2 Required 3 69,300 43,800 115,600 186,000 414,700 $ 54,300 Dirt Bikes $ 269,000 110,000 159,000 Racing Bikes $ 257,000 153,000 104,000 20,600 15,800 38,600 36,800 80,800 51,400 124,600 167,200 $ 38,800 $ (20,600) 40,200 7,600

The Regal Cycle Company manufactures three types of bicycles - a dirt bike, a mountain bike, and a racing bike. Dota on sales and expenses for the past quarter follow "Allocated on the basis of sales doliars. Management is concerned about the continued lossies shown by the racing bikes and wants a recommendation as to whiether 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 formotted segmented income statement that would be more useful to management in assessing the long-run prottability of the various product lines. Cemplete this question by entering your answers in the tabs below. What is the finandal advantage (Cisadvantage) per quarter of discontinuing the Racing Bikes? 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: '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 stotement 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. Should the production and sale of recing bikes be discontinued? "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 the line should be discontinued. The speclal equipment used to produce racing bikes has no resale value and does not wear 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 profitability of the various product lines. Complete this question by entering your answers in the tabs below. 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