URGENT

3 part question

Exercise 11-2 (Algo) Dropping or Retaining a Segment [LO11-2) The Regal Cycle Company manufactures three types of bicycles-1 dirt bike, a mountain bike, and a racing bike. Dota on sales and expenses for the past quarter follow Total $930,000 471,000 459,000 Dirt Bikes $ 260,000 115,000 149,000 Mountain ikea $ 408,000 197,000 211.000 Racing Bikes $ 25,000 159,000 99,000 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 Het operating income (loan) 69,000 44,000 115,200 165,000 415,000 $ 46,000 8,400 20,500 40,290 52,800 121,900 $ 27,100 40,000 8,000 38,300 81,600 168,700 $ 42,300 20,600 15,500 36,700 51,600 124.400 (25,400) "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 property 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 Required 2. Required What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 > Exercise 11-2 (Algo) Dropping or Retaining a Segment (LO11-2) 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: Mountain Total Dirt Bikes Bikes Racing Bikes Sales $ 930,000 $ 264,000 $ 400,000 $ 250,000 Variable manufacturing and selling expenses 471,000 115,000 197,000 159,000 Contribution margin 459,000149,000 211,000 99,000 Fixed expenses Advertising, traceable 69,800 8,400 40,800 20,600 Depreciation of special equipment 44,000 20,500 8,000 15,500 Salaries of product-line managers 115,200 40,200 38,300 36,700 Allocated common fixed expenses 185,000 52,800 81,600 51,600 Total fixed expenses 415,000 121,900 168,700 126,400 Het operating inconte (loan) 44,000 $ 27,100 $ 42,300 $(25,400) "Allocated on the basis of sales dollars. Management is concerned about 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 hos 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 property 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 Should the production and sale of radng bikes be discontinued? Yes NO Required 1 Required 3 > Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (lons) 69,800 44,000 115,200 186,000 415.000 $ 44,000 8,400 20,500 40,200 52,800 121,900 $ 27,100 40,000 8,000 38,300 81,600 168,700 $ 12,300 20,600 15,500 36,709 51,600 124,400 $ (25,400) "Allocated on the basis of sales dollars. Management is concemed 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 varlous product lines. 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 Bike Racing Bikes Contribution margin (los) Traceable foxed expenses Total traceable foed expenses Product line segment margin (5) Net operating incomodoss) Required 2