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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
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: Allocated on the bass of sales dollors: Manapernent is concemed about the continued losspes shown by the rocing bikes and Wants s recommencation as to whether or nof the line should be discontinued. The specisl equipment used to produce lacing bkes has no resale volue and does not wear out. Required: 1. What is the financial advantage (disadvantoge) per quatter of dscontioung the Rocing kikes? 2 Shouid the production and sble of racing bires be discontinued? 3. Prepare a propely formatted segmented incoine statement thot woud be mote useful to manogement in assessing the long-tun protitabnity of the various product ines
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