homework - Connect Ch 11 homework i Saved Help Save & Exit Subm 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 $ 928, 000 $ 266, 000 $ 404, 000 $ 258, 000 Variable manufacturing and selling expenses 474, 000 119, 000 200, 000 155, 000 12.5 Contribution margin 454, 000 147, 000 204, 000 103, 000 points Fixed expenses: Advertising, traceable 69,500 8, 600 40, 600 20, 300 03:59:45 Depreciation of special equipment 44, 000 21, 000 7, 600 15, 400 Salaries of product-line managers 114, 600 40, 500 38, 400 35, 700 Allocated common fixed expenses* 185, 600 53, 200 80, 800 51, 600 Skipped Total fixed expenses 413, 700 123, 300 167, 400 123, 000 Net operating income (loss) $ 40,300 $ 23, 700 $ 36, 600 $ (20, 000) References "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