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 probability of the various product lines

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: Dirt Mountain Racing Total Bikes Bikes nikee 922,000 $266,000 403,000 253,000 475,000 115,000 203,000 157,000 447,000 151,000 200,000 96,000 sales Variable manufacturing and selling expenses Contribution margin Tixed expens Advertising, traceable Depreciation of special equipment Baiaries of product-line managers Allocated on fixed expenses Total Eixed expenses Not operating incomn lon) es 70.500 8.900 40,700 20,900 43.400 20,600 7.600 15,200 115,100 40,400 38,600 36,100 184,400 53,200 30, 600 50,600 413,400 123, 100 167,500 122,800 $ 33,600 $ 27,900 $ 32,500 $(26.800) "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 property formatted segmented Income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Required: Required 2 Required 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. Tots Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (losa) Traceable foxed expenses ces Total traceable fxed expenses Product line segment margin (0) Net operating Income (los)