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Help Saw 17 The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a...

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Accounting

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Help Saw 17 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 points $300,000 90,000 150,000 $ 60,000 120,000 ,000 180,000 63,000 90,000 27,000 27,000 60,000 33 Fixed expenses: 30,000 10,000 14,000 6,000 23,000 6,000 9,000 ,000 35,000 12,000 13,000 10,000 60,000 18,000 30,000 12,000 -66,000 36,000 $ 32,000 $17,000 24,000 (9,000) Depreciation of special equipment Allocated common fixed expenses Total fixed expenses income (loas) ed 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 Reterencesthe 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 3. Prepare a properly formatted segmented income statement thet would be more useful to management in assessing the long-run profitability of the various product lines n and sale of racing bikes be discontinued? Complete this question by entering your answers in the tabs below

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