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 Racing Bikes 5251,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expensess Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expense Total fixed expenses Net operating income (loss) Allocated on the basis of sales dollars. Total Dirt Bikes $920,000 $263,000 467,000 112,000 Mountain Bikes $406,000 201,000 154,000 453,000 151,000 205,000 97,000 69,100 8,100 40,200 20,800 43,400 20,700 7,500 15,200 115,600 40,700 38,300 36,600 164,000 52.600 412,100 122,100 $1,200 167,200 50,200 122,800 $ 40,900 $ 28,900 $ 37,800 $125,000) 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 11 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial advantage (disadvantage) per quarter