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: 7:18 Sales Variable manufacturing and selling expenses Contribution margin Fixed expense Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses ces Net operating incone (loss) "Allocated on the basis of sales dollars. Tutal $ 926,000 465,000 Dirt Bikes $263,000 111,000 Mountain Bikes $ 407,000 196,000 Racing Rikes $256,000 158,000 461,000 152,000 211,000 98,000 69,300 8,400 40,300 20,600 43,700 20,300 7,900 15,500 114,900. 40,400 38,900 35,600 185,200 52,600 #1,400 $1,200 413,100 121,700 168,500 122,900 $ 47,900 $ 30,300 $42,500 $(24,900) 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. < Prev 11 of 11 Nav Check my