2 Chec 1.66 Total points Sales Variable manufacturing and selling expenses Contribution margin $ 927,000 476,000 451,000 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: Mountain Bikes Racing Bikes $ 409, 000 206, 000 203,000 $ 257,000 Dirt Bikes $ 261,000 117,000 144,000 Fixed expenses: eBook Allocated common fixed expenses* Hint Net operating income (loss) *Allocated on the basis of sales dollars. Advertising, traceable Depreciation of special equipment Salaries of product-line managers. Total fixed expenses 69, 400 8,800 40, 200 43, 300 20, 700 7, 200 115, 800 40, 900 38, 800 185, 400 52, 200 413, 900 122, 600 81, 800 168,000 153, 000 104,000 20, 400 15, 400 36, 100 51,400 123, 300 $ 37,100 $ 21,400 $ 35,000 $ (19,300) Ask Print 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? Financial advantage (disadvantage) per quarter