Check m Dirt Racing Mountain Bikes Bikes Bikes Total $ 924,000 $268,000 $ 404,000 $ 252,000 Sales Variable manufacturing and selling 465,000 110,000 196,000 159,000 expenses Contribution margin 459,000 158,000 208,000 93,000 Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses 70,600 43,600 114,400 8,900 20,700 40,700 40,900 7,300 38,300 80,800 20,800 15,600 35,400 50,400 122,200 184,800 413,400 53,600 123,900 167,300 $45,600 $ 34,100 $ 40,700 $ (29,200) Net operating income (loss) *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 properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines