I only need Question 1 answered

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 Total $927.000 464,000 463,000 birt Bikes $265,000 112,000 153,000 Mountain Bikes $405,000 198.000 207,000 Racing Bikes $257.000 156,000 103,000 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) 70, 100 9,000 43,300 20,400 115,00 60,200 185,400 53.000 413, DO 122,600 $ 49,200 $ 30,400 $ 40,700 7.700 38.800 1.000 168,200 38,800 20,000 15,200 36.000 51,400 123,000 $(20,000) "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