2 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: 1.66 points Skipped Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers $ 923,000 479,000 eBook Allocated common fixed expenses* Total fixed expenses Net operating income (loss) Hint *Allocated on the basis of sales dollars. Total 444,000 Dirt Bikes $ 267,000 116,000 151,000 Mountain Bikes Racing Bikes $ 400,000 209,000 191,000 $ 256,000 154,000 102,000 69,800 8,700 40,700 20,400 43,700 20,300 8,000 15,400 114,400 40,600 38,200 35,600 184,600 53,400 80,000 51,200 412,500 123,000 166,900 122,600 $ 31,500 $ 28,000 $ 24,100 $ (20,600) 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? < Required 1 Required 2 >