homework need help.

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 2 Total Bikes Bikes Bikes points Sales $ 925, 000 $267, 000 $ 407, 000 $ 251, 000 Variable manufacturing and selling expenses 475, 000 120 , 000 203, 000 152 , 000 204, 000 eBook Contribution margin 450, 000 147, 000 99, 000 Fixed expenses : Hint Advertising, traceable 69, 600 8 , 400 40, 800 20, 400 Depreciation of special equipment 42 , 900 20, 400 7, 200 15 , 300 References Salaries of product-line managers 115, 000 40, 200 38 , 200 36, 600 Allocated common fixed expenses* 185 , 000 53 , 400 81 , 400 50 , 200 Total fixed expenses 412 , 500 122 , 400 167 , 600 122 , 500 Net operating income (loss) $ 37,500 $ 24, 600 $ 36, 400 $ (23, 500) *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