Total $ 924,000 477,000 447,000 Dirt Bikes $ 269,000 116,000 153,000 Mountain Bikes $ 403,000 210,000 193,000 Racing Bikes $ 252,000 151,000 101,000 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) 70, 700 43,800 113,900 184,800 413, 200 $ 33,800 9,000 20,900 40,500 53,800 124,200 $ 28,800 40,900 7,400 38,100 80,600 167,000 $ 26,000 20,800 15,500 35, 300 50,400 122,000 $ (21,000) *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 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? 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 management in assessing the long-run profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) 0 0 0 0 Traceable fixed expenses: Total traceable fixed expenses 0 0 0 Oo Product line segment margin (loss) 0 $ 0 $ $ 0 Net operating income (loss) $ 0