Check my wou 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 Total Bikes Bikes Bikes Sales $ 931,000 $266,000 $ 409,000 $ 256,000 Variable manufacturing and selling expenses 457,000 113,000 193,000 151,000 Contribution margin 474,000 153,000 216,000 105,000 Fixed expenses: Advertising, traceable 70,200 8,900 40,800 20,500 Depreciation of special equipment 43,600 20,500 7,200 15,900 Salaries of product-line managers 115,000 40,600 38,800 35,600 Allocated common fixed expenses* 186,200 53,200 81,800 51,200 Total fixed expenses 415,000 123,200 168,600 123,200 Net operating income (loss) $ 59,000 $ 29,800 $ 47,400 $(18,200) ces *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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Free Required 2 > Financial (disadvantage) per quarter Financial advantage per quarter 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 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No Required 3 > Required 1 Required 2 Required 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses: Advertising, traceable Common fixed expenses Depreciation of special equipment Salaries of the product line managers