Ch 11 Homework Help Save & E Che 1 1 The Regal Cyce 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 points Dirt Mountain Racing Total Bikes Bikes Bikes $936,000 $268,000 $409,000 $ 259,000 465,000 111,000 201,000 153,000 471,000 157,888 288,888 106,000 B00H Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipoent Salaries of product-line managers Allocated como fixed expenses. Total fixed expenses Net operating income (105) 69,400 8,300 40,900 28,200 44,100 20,900 7,600 15,600 115,200 40,300 38,800 36,100 187,200 53,600 81,800 51,800 415,900 123, 100 169, 100 123,700 555,100 $ 33,900 $ 38,900 $17,700) D Print Perences "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. Reguve 1 Required 2 Required 3 What is the financial novantage (isadvantage) per quarter of discontinuing the racing biket? Required 2 > ME