Total $ 929,000 477,000 452,000 Dirt Bikes $ 268,000 119,000 149,000 Mountain Bikes $ 409,000 204,000 205,000 Racing Bikes $ 252,000 154,000 98,000 8,400 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) 68,900 43,900 114,800 185,800 413,400 $ 38,600 20,700 40,600 53,600 123,300 $ 25, 700 40,300 7,900 38,500 81,800 168,500 $ 36,500 20,200 15,300 35, 700 50,400 121,600 $ (23,600) *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? 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 Sales 929,000 Variable manufacturing and selling expenses Contribution margin (loss) 929,000 0 0 0 Traceable fixed expenses: Depreciation of special equipment Salaries of the product line managers Advertising, traceable Total traceable fixed expenses 0 O 0 0 Product line segment margin (loss) 929,000 $ 0 $ $ O $ 0 Common fixed expenses Net operating income (loss) $ 929,000