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: Dirt Mountain Racing Bikes $927,000 $268,000 409,000 250,000 Total Bikes Bikes Sales Variable manufacturing and selling 457,000 112,000 192,000 153,000 expenses Contribution margin Fixed expenses: 470,000 156,000 217,000 97,000 Advertising, traceable Depreciation of special equipment Salaries of product-1ine managers Allocated common 40,200 7,800 38,600 81,800 168,400 69,200 8,700 44,100 20,800 114, 800 40,100 53,600 413,500 123,200 20,300 15,500 36,100 50,000 121,900 56,500 32,800 48,600 (24,900) fixed expenses* 185,400 Total fixed expenses 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