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 R Bikes Tot Sales 935,000 $269,000 $407,000 259,000 462,000 113,000 195,000 154,000 Variable nanufacturing and sellin462,00 113,000 195,000 154000 expenses Contribution margin Fixed expenses: 473,000 156,000 212,000 105,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 69,800 8,700 40,600 20,500 44,000 20,4007,80015,800 114,800 40,40038,200 36,200 187,000 53,800 81,400 51,800 15,600 123,300 168,000 124, 300 Total fixed expenses Net operating income (loss) 57,400 32,700 44,000 $(19,300) ces Allocated on the basis of sales dollars. Management is concerned about the continued losses shown 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? by the racing bikes and wants a recommendation as to whether or not 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? 1 of SlI Next> MacBook Air Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or 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 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would profitability of the various product lines. financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? be more useful to management in assessing the long-ru Book Complete this question by entering your answers in the tabs below. Hint Required 1 Required 2 Required3 erences What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? (disadvantage) per quarter Required 2> Next > Prev 1 of 5 MacBook Air profitability of the various product lines. Complete this question by entering your answers in the tabs below. ok Required 1 Required 2 Required 3 int 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. Totals Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses: Total traceable fxed expenses Product line segment margin (loss) Net operating income (loss) Required 2 Prev 1 of 5 Next MacBook Air
