The Regal Cycle Company manufactures three types of bicycles$-$a dirt bike, a mountain bike, and a racing bike. Data on sales and

expenses fur the past quarter follow.

Wlocated 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 eculpement used to produce recing bikes has no resale value and does not wear out.

Required:

What is the financlal advantage $($disadvantagei per quarter of discontinuing the Racing Bikes?

Should the production and sale of racing bikes be discontinued?

Prepare a properly fomatted segmented income statement that would be more useful to management in assessing the long$-$run

profitatility of the various product lines.

Complete this question by entering your answers in the tabs below.

Required $1$

What is the finandial advantage $($disadvantage$)$ per quarter of diacontinuing the Racing Bikes?

Required $1$

Prepare a properly formatted segmented income statement that would be more useful to management in ascessing the

profitability of the various product lines.