2 The Regal Cycle Company manufactures three types of bicycles- dirt bike, a mountain bike, and a racing bike, Data on sales and expenses for the past quarter follow: 166 points Dirt Mountain Racin Total Bike Bikes Bike $923,000 $263,000 $406,000 $ 254,000 476,000 116.000 202,000 155,000 447,000 147 000 204,000 55,000 Book Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Milocated common fixed expenses Total fixed expenses Net operating Income (10) Print 70,200 43,500 116,200 184,500 414,500 532,300 8.900 41,000 20,300 20, 200 7.700 15,600 41,000 38,800 36.400 52.600 81.200 50,800 122/200 168,700 123, 100 24.300 5.35,300 $122.400) 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 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Required 2 Complete this question by entering your answers in the tabs below. Required 1 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. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 Contribution margin (loss) Traceable fixed expenses: 0 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 $ OS 0 $ 0 Net operating income (loss) $ 0