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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. Total $ 923,000 465, Bee 458,eee Dirt Bikes $265,000 117,eee 148,eee Mountain Bikes $ 406,000 191.000 215, 000 Racing Bikes $ 252,080 157. eee 95, eee 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, 100 43,389 115,200 184.600 412,200 45,800 8,200 20,500 40,900 53. eee 122,6ee $ 25,4ee 40,500 7,100 38,300 81.200 167, 100 47,900 20,400 15,700 36,000 50.400 122,500 $(27,5ee) $ $ "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 racina bikes be discontinued? 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-rur profitability of the various product lines Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes

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