Wk 4 - Practice: Wk 4 Knowledge Check [due Day 5] i Saved 5 The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a expenses for the past quarter follow: 5.71 Mountain points Total Dirt Bikes Bikes Sales $ 921, 000 $ 266, 000 $ 402,090 Variable manufacturing and selling expenses 472, 000 119, 090 199, 900 449, 080 203, 000 Book Contribution margin 147, 006 Fixed expenses: Hint Advertising, traceable 70,090 9,900 40, 400 Depreciation of special equipment 44, 000 20, 600 7,400 References Salaries of product- line managers 114, 790 40, 700 38, 060 Allocated common fixed expenses" 184, 200 53 , 200 80 , 406 Total fixed expenses 412, 900 123, 500 166, 290 Net operating income (loss) $ 36, 100 $ 23, 500 $ 36,800 `Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommend the line should be discontinued. The special equipment used to produce racing bikes has no resale value 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 profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Mc Graw