1 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. pints Skipped eBook Sales 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 Net operating income (loss) Total Dirt Bikes Mountain Bikes Racing Bikes $ 923,000 $265,000 $ 404,000 $254,000 468,000 114,000 199,000 155,000 455,000 151,000 205,000 99,000 69,700 8,300 40,900 20,500 44,100 20,800 7,400 15,900 115,900 40,000 38,700 36,400 184,600 414,300 53,000 50,800 50,800 122,900 167,800 123,600 $ 40,700 $ 28,100 $ 37,200 $(24,600) References "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? Required 1 Required 2 >