1 25 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 Sales eBook Variable manufacturing and selling expenses: Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Hnt Net operating Income (loss) "Allocated on the basis of sales dollars. Print Total $ 931,000 479,000 452,000 Dirt Bikes $267,000 Mountain Bikes 5 407,000 Racing Bikes $257,000 119,000 145,000 210,000 197,000 150,000 107,000 69,400 43,200 8,300 40,500 20,600 20,100 7,800 15,300 115,700 40,500 39,000 16,200 186, 200 414,500 53,400 81,400 51,400 122,300 168,700 123,500 $ 37,500 $ 25,700 $28,300 5 (16,500) References 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? Respond t Required 2 >