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 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses! Advertising, traceable Depreciation of special equipment Salaries of product-Line managers Allocated connon fixed expenses. Total fixed expenses Net operating income (Loss) Dirt Mountain Racing Total Bikes Bikes Bikes $926,000 $263,000 $ 407,000 $ 256,000 467,000 112,000 199,000 156,000 459.000 151,000 208,000 180,000 68,900 8,300 40,200 20,400 43,600 20,480 7.800 15,400 114,100 40,200 38,800 35, 100 185,200 52,600 81,400 51,200 411,800 121, See 168,200 122,100 5 47,200 $ 29,500 $ 39,800 5122,120) ebook Print Herences "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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required) What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? ces Required 2 > Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? OYes ONO 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 Contribution margin (loss) Traceable fixed expenses Total traceable foxed expenses Product line segment margin (loss) Net operating income (loss)