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: Total $ 923,000 461,000 462,000 Dirt Bikes $ 266,000 115,000 151,000 Mountain Bikes $ 403,000 196,000 207.000 Racing Bikes $ 254,000 150,000 104,000 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 Net operating income (loss) 69,500 44,100 114,800 184,600 413,000 $ 49,000 8,700 20,100 40,200 53,200 122,200 $ 28,800 40,600 8,000 38,300 80,600 167,500 $ 39,500 20,200 16,000 36,300 50, 800 123,300 $ 119,300) "Allocated 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 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? Required 2 DAN AULA MALDAND Sales $ 923,000 $ 266,000 $ 403,000 $ 254,000 Variable manufacturing and selling expenses 461,000 115,000 196,000 150,000 Contribution margin 462,000 151,000 207.000 104,000 Fixed expenses: Advertising, traceable 69,500 8,700 40,600 20,200 Depreciation of special equipment 44,100 20,100 8,000 16,000 Salaries of product-line managers 114,800 40,200 38,300 36,300 Allocated common fixed expenses 184,600 53,200 80,600 50.800 Total Fixed expenses 413,000 122,200 167,500 123,300 Net operating income (loss) $ 49,000 $ 28,800 $ 39,500 $ (19,300) "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whe the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not w 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 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? Yos NO Saved OYUNCHU OVULUI Curcu awy CTUL WINES TO SICUTULUI the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear 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 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 Racing Bikes 0 0 0 0 Contribution margin (loss) Traceable fixed expenses 0 0 0 0 Total traceable fixed expenses Product line segment margin (loss) ols 0 $ 0 $ 0 $ 0 Net operating income (loss)