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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

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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 $ 923,000 $263,000 $ 406,000 $ 254,000 468,000 111,000 201,000 156,000 455,000 152,000 205,000 98,000 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 Het operating income (los) 70,200 8,700 40,900 20,600 43,900 21,000 7,700 15,200 114,800 40,200 38,400 36,200 184,600 52.600 81,200 50.800 413,500 122,500 168,209 122,800 $ 41,500 $ 29,500 $ 36,800 ${24, 800) "Allocated on the basis of sales dollars. Management is concemed 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 propdrly formatted segmented income statement that would be more useful to management in ossessing the long run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required Required 2 Required 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 manageme 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 (disadvantage) per quarter Required Required 2 > 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 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. Totals Dirt Bikes Mountain Bikes Sales Racing Bikes Contribution margin (loss) Traceable fixed expenses 0 0 0 0 Total traceable foxed expenses Product line segment margin (los) 0 0 0 0 0 $ 0 $ 0 $ 0 Net operating income (108) $ 0

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