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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: Dirt Mountain Racing Total Bikes Bikes Bikes $ 920,000 $265,809 $ 402,000 $ 253,000 464.eee 110,000 zee.ee 154,888 456,000 155,000 202.000 99,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of Special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 69,300 8,600 43,600 20,500 114,800 40,200 184,000 53,000 411,700 122,389 $ 44,300 $ 32,700 40,500 20,200 7,989 15,200 38,900 35,700 80,400 50.600 167-700 121,789 34,300 $(22,700) "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? Required 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: Dirt Mountain Racing Total Bikes Bikes Bikes $ 920,000 $265,699 $ 402,000 $253,899 464,00 119,000 200, cee 154,000 456,000 155,000 202,000 99,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 69,300 8,600 40,500 2e, 200 43,600 20,5ee 7,900 15,200 114,800 48,200 38,900 35,700 184,000 53,eeg 80,400 50,600 411,700 122,300 167,7ee 121,700 $ 44,300 $ 32,700$ 34,3ee 5(22,78e) "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 Should the production and sale of racing bikes be discontinued? Yes ON 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 Dirt Mountain Racing Total Bikes Bikes Bikes $ 920,000 $265,000 $482,800 $ 253,000 464,000 110,000 200,000 154,000 456,00 155,000 202,600 99,800 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated on fixed expenses Total fixed expenses Net operating income Clos) 69,300 8,600 40,500 20,200 43,600 20,500 7,900 15,200 114,800 40,200 38,900 35,700 184,000 53,000 80,400 50,600 411,200 122.360 167, 700 121,700 $ 44,300 $ 32,700 $ 34,300 $(22,700) '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: 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 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long- un profitability of the vanous product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceubi fod expenses Total traceable fixed expenses Product line segu marginos Net operating income foss