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The Regal Cycle Company manufactures three types of bicycles-ma dirt biko, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow 5 points 2 03:52:04 eBook Dirt Mountain Racing Total Bikes Bikes Bikes Sales $930,000 $269,000 $407,000 $ 254,000 Variable manufacturing and 466,000 111,000 196,000 159,000 selling expenses Contribution margin 464,000 158,000 211,000 95,000 Fixed expenses: Advertising, traceable 70,300 8,400 41,000 20,900 Depreciation of 44,000 special equipment 20,900 7.900 15,200 Salaries of product-line 115,000 40,900 38,400 35,700 managers Allocated common fixed expenses 186,000 53,800 81,400 50,800 Total fixed expenses 415,300 124.000 160, 700 122,600 Net operating income $ 48,700 $ 34,000 $ 42,300 $(27,600) (lons) Hint Print Reference "Allocated on the basis of sales dollars Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes hos no resale value and does not wear out. Required: What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines Complete this question by entering your answers in the tabs below. Required Required Required Prepare a properly formatted segmented Income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Mountain Totals Dirt Bikes Racing Bikes Bikes Contribution margin (5) Traceable fixed expenses 0 0 0 0$ 0 OS 0 0 Total traceable fred expenses 0 Product line segment margin (loss) 03 Not operating income (10) $ 0

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