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) Total Dirt Bikes Mountain Bikes Racing Bikes $ 921,000 $269,000 $ 401,000 $ 251,000 469,000 119,000 197,000 153,000 452,000 150,000 204,000 98,000 69,800 8,700 40,600 20,500 43,500 20,500 7,400 15,600 115,100 40,200 38,600 36,300 184,200 53,800 412,600 80,200 50,200 123,200 166,800 122,600 $ 39,400 $ 26,800 $ 37,200 $(24,600) *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? Financial (disadvantage) per quarter $ (11,000)