3 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: Check my work Sales ts eBook Hint Print eferences 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) "Allocated on the basis of sales dollars. Total $ 921,000 Dirt Bikes $265,000 Mountain Dikes $400,000 Racing Bikes $256,000 477,000 117,000 204,000 156,000 444,000 140,000 196,000 100,000 69,200 8,800 40,300 20,100 44,500 20,900 7,800 15,000 116,100 40,700 38,400 37,000 184,200 53,000 80,000 $1,200 414,000 123,400 166,500 124,100 $ 30,000 $ 24,600 $29,500 $ (24,100) 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. by entering your answers in the tabs below.