The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a...

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The Regal Cycle Company manufactures three types of bicyclesa 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 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 $ 927,000 Dirt Bikes 476,000 451,000 $ 263,000 117,000 146,000 Mountain Bikes $ 407,000 201,000 Racing Bikes $ 257,000 158,000 206,000 99,000 69,100 8,500 40,400 20,200 43,200 20,300 7,700 15,200 115,200 40,400 38,900 35,900 185,400 52,600 81,400 51,400 412,900 121,800 168,400 122,700 $ 38,100 $ 24,200 $ 37,600 $ (23,700) 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 1 Required 2 > The Regal Cycle Company manufactures three types of bicyclesa 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 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 $ 927,000 Dirt Bikes 476,000 451,000 $ 263,000 117,000 146,000 Mountain Bikes $ 407,000 201,000 Racing Bikes $ 257,000 158,000 206,000 99,000 69,100 8,500 40,400 20,200 43,200 20,300 7,700 15,200 115,200 40,400 38,900 35,900 185,400 52,600 81,400 51,400 412,900 121,800 168,400 122,700 $ 38,100 $ 24,200 $ 37,600 $ (23,700) 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 1 Required 2 >