The Regol Cycle Company manufactures three types of bicycles-o dirt bike, a mountain bike, and a racing bike. Doto on sales ond expenses for the past quarter follow: Total $934.000 468,000 466,800 Dirt Bikes $ 268,000 112,000 151,080 Mountain Bikes $ 407,600 201,00 206,000 Racing Bikes $ 259,000 150,000 109,000 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 Incone (loss) 70,000 43,500 115,300 155,800 415,600 5.50,400 0,000 20,50 40,500 53,600 123,700 $ 27,300 40,600 7.300 38,100 81,400 167400 $ 38,600 20,600 15,700 36,400 51,800 124500 $ (15,500) "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 woed to produce racing bikes has no resole 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 Book 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 o properly formatted segmented income statement that would be more useful to management in assessing the long run profitability of the various product lines Hent Pt Palaron 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 Blikes? Required 2 > EBOOK Required: 1 What is the financial advantage (disadvantage) per quarter of discontinuing the Rocing 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 Hint References 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? Yes No (Required 1 Required 3 > Required 1 Required 2 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 To Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (los) Traceable fixed expenses co Total traceable foxed expenses Product line segment margin 00ss) Net operating income doss)
