10 1 points 00:47:40 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. 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) 117,000 Total $ 922,000 471,000 Dirt Bikes: $265,000 451,000 148,000 Mountain Bikes $ 404,000 197,000 207,000 Racing Bikes $ 253,000 157,000 96,000 69,800 8,100 40,900 20,800 44,200 20,800 7,900 15,500 116,700 40,800 38,900 37,000 184,480 53,000 80,800 50,600 415, 100 $ 35,900 122,700 168,500 123,980 $ 25,300 $ 38,500 $ (27,900) "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