The Regal Cycle Company manufactures three types of blcycles-a dirt bike, a mountain bike, and a racing bike

The Regal Cycle Company manufactures three types of blcycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes $ 919,000 $268,000 $ 400,000 $ 251,000 481,000 117,000 210,000 154,000 438,000 151,000 190,000 97,000 Sales Variable manufacturing and selling expenses Contribution margin Tixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses. Total fixed expenses Net operating income (loan) 69,500 8,200 40,600 20,700 44,100 20,700 7,500 15,900 114,200 40,400 38,400 35,400 183,000 53,600 80,000 50,200 411,600 122,900 166,500 122,200 $ 26,400 $ 20,100 $ 23,500 (25,200) "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.
Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful t. profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Red bred 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? ces Financial (disadvantage) per quarter Required 2 >
Required 1 Required 2 Required 3 Prepare a properly formatted segmented Income statement that would be more useful to management in asse run profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 Contribution margin (loss) Traceable fixed expenses: 0 0 Total traceable fixed expenses 0 0 0 0 0 0 Product line segment margin (loss) $ 0 $ 0 0 A S 0 Net operating income (loss)