Check 2 "Allocated on the basis of sales dollars. 56 66 points 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. eBook Hint Print References 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 discontinuires the Racing bikes? Financial (disadvantage) per quarter Required 2 > Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the run profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) 0 0 0 - The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes $ 924,000 $264,000 $ 408,000 $ 252,000 480,000 116,000 206,000 158,000 444,000 148,000 202,000 94,000 Sales 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) 68,700 8,400 40,200 20,100 44,200 20,900 7,800 15,500 114,600 40,600 38,100 35,900 184,800 52,800 81,600 50,400 412,309 122,700 167,700 121,900 $ 31,700 $ 25,300 $ 34,300 $(27,900) "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recomme