Dirt Mountain Racing Total Bikes Bikes Bikes $936,000 $267,000 $410,000 $ 259,000 466,000 118,000 194,000 154,000 470,000 149,000 216,000 105,000 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) 69,800 8,500 40,700 20,600 42,900 20,200 7,300 15,400 115,300 40,500 38,000 36,800 187,200 53,400 82,000 51,800 415,200 122,600 168,000 124,600 $ 54,800 $ 26,400 $ 48,000 $(19,600) "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?