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, book Hint Print ferences Mountain Total Dirt Bikes Bikes Racing Bikes Sales $920.ece $ 268,000 $400,000 5 252,000 Variable manufacturing pd selling expenses 479.000 117,000 203,00 159,80e Contribution margin 461,000 151,000 197.000 93,000 Fixed expensest Advertising, traceable 69,480 8,600 40,500 20,300 Depreciation of special equipment 43,700 20,900 7,600 15,200 Salaries of product-Line managers 115,200 40,500 38,700 36,000 Allocated common fixed expenses. 184,000 53,600 80,000 50,400 Total Fixed expenses 412.300 123,600 166,00 121,900 Net operating income tloss) $ 28,700 $ 27,400 $ 30,200 $(28,900) "Allocated on the basis of sales dollars Management is concerned about the continued losses shown by the racing bikes and wants o 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 MC Graw Prev 5 Next > Question 1. Chapter 13 Homework Connect Chapter 13 Homework The Regal Cycle Company Mansactus The Type OC Help Save & Exit Submit 1 Check my work 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. 20 points Complete this question by entering your answers in the tabs below. Hint Required Required 2 Required What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Revirada > M cycle Company Manufacture Saved Help Save & Exit Check 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 25 Should the production and sale of racing bikes be discontinued? Yes No (Required 1 Required) Required 1 Required 2 my 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 Book Hint Contribution margin (los) Traceable foed expenses 0 0 0 0 Print Terences Total traceable foxed expenses Product line segment margin (los) 0 0 ols 0 $ os 0 Net operating income (los) $
