8 00 1 points Skipped Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2] 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. Sales Variable manufacturing and selling expenses Contribution margin Book Fixed expenses: Hint Prin Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses. Total fixed expenses Net operating income (loss) "Allocated on the basis of sales dollars. Total $ 923,000 469,000 454,000 Dirt Bikes $270,000 $ 402,000 116,000 202,000 154,000 200,000 Mountain Bikes Racing Bikes $ 251,000 151,000 100,000 68,600 8,200 40,200 20,200 42,900 20,300 7,300 15,300 116,000 40,700 38,820 36,500 184,600 54,000 80,400 50,200 412,100 123,200 166,700 122,200 $ 41,900 $ 30,800 $ 33,300 5 (22,200) References 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? Required 2> < Prev 8 of 24 Next > ints Skipped Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2] 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: eBook Hint 0 o Print 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). "Allocated on the basis of sales dollars. Total $ 923,000 469,000 454,000 Dirt Bikes $ 270,000 116,000 154,000 Mountain Bikes $ 402,000 202,000 200,000 Racing Bikes $ 251,000 151,000 100,000 68,600 8,200 40,200 20,200 42,900 20,300 7,300 15,300 116,000 40,700 38,800 36,500 184,600 412,100 54,000 80,400 50,200 123,200 166,700 122,200 $ 41,900 $ 30,800 $ 33,300 $ (22,200) References 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 11 Require 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No 1 points Skippe eBook Prim Net operating incone (loss) Allocated on the basis of sales dollars. 412,10 $41,900 123,200 166,700 122,200 $30,588 $33,300 5 (22,200) 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 References 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. Contribution margin (loss) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Total Dirt Bikes Mountain Bikes Racing Bes