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Total $ 920,000 469,000 451,000 Dirt Bikes $ 263,000 116,000 147,000 Mountain Bikes $ 407,000 201,000 206,000 Racing Bikes $ 250,000 152,000 98,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managera Allocated common fixed expenses Total fixed expenses Net operating income (losa) 69,100 44,200 114,000 184,000 411,300 $ 39,700 8,200 20,500 40,000 52,600 121,300 $ 25, 700 40,100 7.900 38,100 81,400 167,500 $ 38,500 20,800 15,800 35,900 50,000 122,500 $ (24,500) "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. 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? Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: Per 12,000 Units Unit per Year Direct materials $ 12 $ 144,000 Direct labor 8 96,000 Variable manufacturing overhead 2 24,000 Fixed manufacturing overhead, traceable 9. 108,000 Tixed manufacturing overhead, allocated 12 144,000 Total cost $ 43 $ 516,000 One-third supervisory salaries: two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage disadvantage) of buying 12,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $120,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Required: Required 2 Required) Required 4 Assuming me company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside supplier

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