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: Mountain Bikes $ 400,000 Racing Bikes $ 250,000 Dirt Total Bikes $ 920,000 $270,000 476,000 115,000 444,000 155,000 202,000 159,000 198,000 91,000 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) 69,000 8,100 43,300 20,300 114,600 40,500 184,000 54,000 410,900 122,900 $ 33,100 $ 32,100 40,200 20,700 7,700 15,300 38,800 35,300 80,000 50,000 166,700 121,300 31,300 $ (30,300) $ *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. $ 920,000 $270,000 $ 476,000 115,000 444,000 155,000 400,000 202,000 $ 250,000 159,000 198,000 91,000 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) 69,000 8,100 43,300 20,300 114,600 40,500 184,000 54,000 410,900 122,900 $ 33,100 $ 32,100 $ 40,200 20,700 7,700 15,300 38,800 35, 300 80,000 50,000 166,700 121,300 31,300 $(30,300) *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 1 Required 2 > Financial (disadvantage) per quarter Financial advantage per quarter Dirt Total Bikes $ 920,000 $270,000 476,000 115,000 444,000 155,000 Mountain Racing Bikes Bikes $ 400,000 $ 250,000 202,000 159,000 198,000 91,000 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) 69,000 8,100 43,300 20,300 114,600 40,500 184,000 54,000 410,900 122,900 $ 33,100 $ 32,100 $ 40,200 20,700 7,700 15,300 38,800 35,300 80,000 50,000 166,700 121,300 31,300 $ (30,300) *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 Should the production and sale of racing bikes be discontinued? OYes Ono 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 managemen run profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bil Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)