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 5922.000 477,000 455,000 Sales Variable manufacturing and selling expenses Contribution natin Dirt Bike 5.268,000 Mountain lakas 5405,000 306,000 200.000 Hacing Bikes 5.250,000 157.000 101.000 150 000 Advertising, traceable Depreciation of special equipment Salaries of product lines Allocated on fixed expenses Total fixed expenses Net operating incon (los) 70,000 12.900 113,900 186, 100 110.000 541,000 20,200 40,200 5600 122,00 531,200 41.00 7,300 18,100 11,200 21,000 15,400 35,600 $1,000 133600 5 (72,600) $32,000 "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 Blket? 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. rating income (loss) $ 41,000 $ 31,200 $ 32,400 $ (22,600 "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation the line should be discontinued. The special equipment used to produce racing bikes has no resale value and de 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 asse 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 > Management is concerned about the continued losses shown by the racing bike the line should be discontinued. The special equipment used to produce racing B Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be mor profitability of the various product lines. eBook Hint ASK Complete this question by entering your answers in the tabs below. eferences Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes ONO Required 1 Required 2 Required 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 Bike Racing Elikes Contribution margin (loss) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)
