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What is the financial advantage $($disadvantage$)$ per quarter of discontinuing the Racing Bikes? Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long$-$run profita of the various product lines.

$\backslash$table$[[,$Totals,Dirt Bikes,$\backslash$table$[[$Mountain$],[$Bikes$]],\backslash$table$[[$Racing$],[$Bikes$]]],[$Sales $>,$$$,923,000,$$$,264,000,$$$,403,000\backslash$times $,$$$,254,000\backslash$times $],[$Variable manufacturing and selling expenses,,$472,000,,,,,,],[$Contribution margin $($loss$),,451,000,,264,000,,403,000,,254,000],[$Traceable fixed expenses:,,,,,,,,$],[$Advertising$,$ traceable,,$70,400\backslash$times $,,,,,,],[$Depreciation of special equipment,,$43,000\backslash$times $,,,,,,],[$Salaries of the product line managers,,$115,500\backslash$times $,,,,,,],[$Total traceable fixed expenses,,$228,900,,0,,0,,0],[$Product line segment margin $($loss$),,222,100,$$$,264,000,$$$,403,000,$$$,254,000],[$Common fixed expenses,,$184,600,,,,,,],[$Net operating income $($loss$),$$$,37,500,,,,,,]]$The Regal Cycle Company manufactures three types of bicycles$-$a dirt bike, a mountain bike, and a racing bike. Data on sales and

expenses for the past quarter follow:

$*$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. The disadvantage is not $40,400$ or $34,300.$ None of you have been able to get this right.

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