es 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 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) "Allocated on the basis of sales dollars. Total Dirt Bikes Racing Bikes $920,000 $261,000 $ 406,000 $253,000 461,000 115,000 194,000 152,000 Mountain Bikes 459,000 146,000 212,000 101,000 70,300 9,000 40,500 20,800 44,300 20,800 7,700 15,800 114,600 40,900 38,700 35,000 184,000 52,200 81,200 50,600 413,200 122,900 168,100 122,200 $ 45,800 $23,100 $ 43,900 $(21,200) 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 11 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 > Complete this question by entering your answers in the tabs below. 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. Contribution margin (loss) es Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes Net operating income (loss) < Required 2 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 0