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 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. Total Dirt Bikes Mountain Bikes $ 923,000 465,000 458,000 $ 268,000 113,000 155,000 $ 402,000 195,000 Racing Bikes $ 253,000 157,000 207,000 96,000 69,700 8,900 40,100 20,700 43,500 20,100 7,600 15,800 115,000 40,400 38,100 36,500 184,600 53,600 80,400 50,600 412,800 123,000 166,200 123,600 $ 45,200 $ 32,000 $ 40,800 $ (27,600) 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? Financial advantage (disadvantage) per quarter < Required 1 Required 2 > The Regal Cycle Company manufactures three types of bicyclesa 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 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. Total $ 923,000 465,000 458,000 Dirt Bikes $ 268,000 113,000 155,000 Mountain Bikes $ 402,000 195,000 Racing Bikes $ 253,000 157,000 207,000 96,000 69,700 8,900 40,100 20,700 43,500 20,100 7,600 15,800 115,000 40,400 38,100 36,500 184,600 53,600 80,400 50,600 412,800 123,000 166,200 123,600 $ 45,200 $ 32,000 $ 40,800 $ (27,600) 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 No < Required 1 Required 3 > The Regal Cycle Company manufactures three types of bicyclesa 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 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. Total $ 923,000 465,000 458,000 Dirt Bikes $ 268,000 113,000 155,000 Mountain Bikes $ 402,000 195,000 Racing Bikes $ 253,000 157,000 207,000 96,000 69,700 8,900 40,100 20,700 43,500 20,100 7,600 15,800 115,000 40,400 38,100 36,500 184,600 53,600 80,400 50,600 412,800 123,000 166,200 123,600 $ 45,200 $ 32,000 $ 40,800 $ (27,600) 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 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. Required 1 Required 2 Required 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. Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of the product line managers Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (loss) Racing Bikes Totals Dirt Bikes Mountain Bikes $ 923,000 $ 268,000 $ 402,000 $ 465,000 113,000 195,000 458,000 155,000 207,000 253,000 157,000 96,000 69,700 8,900 40,100 20,700 43,500 20,100 7,600 15,800 115,000 40,400 38,100 36,500 228,200 69,400 85,800 73,000 229,800 $ 85,600 $ 121,200 $ 23,000 $ 229,800 < Required 2 Required 3