Check my work 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 points Dirt Mountain Total Bikes Bikes 8931,000 $267,000 $409,000 476,000 117,000 207,000 455,000 150,000 202,000 Racing Bikes 255,000 152,000 103,000 Skipped Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Mivertising traceable Depreciation of special equipment Salaries of produt-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 69.300 2.100 43,600 20.300 115,400 40.900 186,200 53, 400 1414,500 122,700 $ 40,500 $ 27,300 40.500 .000 18.500 01,800 160,000 33,200 20.700 15.300 36,000 $1,000 123,000 (20,000) "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. Prey 1 of 7 Next >