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The Regar cycle company manufactures three types of bicycles-a dirt bike, a mountain bike, ond o racing bike. Data on satsang expenses for the past quarter follow: Sales Mountain Total Dirt Bikes Bikes Racing Bikes $ 930,000 $ 262,000 $ 410,000 $ 258,000 Variable nanufacturing and selling expenses 463,000 111,000 200,000 152,000 Contribution margin 467,000 151,888 210,000 106,000 Fixed expenses Advertising, traceable 69, 100 8,500 40,288 20,400 Depreciation of special equipment 44,100 20,800 7,400 15,900 Salaries of product-Line managers 115,300 40,300 38,500 36,500 Allocated connon fixed expenses 186,000 52,400 82,000 51,600 Total fixed expenses 414500 122.000 168,180 124, 480 Net operating income (los) $ 52,500 $ 29,000 $ 41,900 $ (18,400) *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: Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes