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Mountain Total Dirt Bikes Bikes Racing Bikes Sales $ 923,000 $ 266,000 5 406,000 5 251,000 Variable manufacturing and selling expenses 455,000 110,000 192.000 153.000 Contribution margin 468.000 156,000 214.000 98.000 Fixed expenses Advertising. traceable 68,900 8,400 40,200 20,300 Depreciation of special equipment 44,100 20,900 2,500 15,700 Salaries of product-line managers 115,400 40.500 38,900 36.000 Allocated common fixed expenses 184.600 53,200 B1,200 50,200 Total fixed expenses 413,000 123,000 167,800 122,200 Net operating income (106) 5 55,000 $ 33,000 46,200 5 (24,200) "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. 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 Required 2 > complete this question ers in the tabs below. Required 1 Required 2 Required 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)

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