Saved Help Save & E 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 Dirt Bikes Sales Variable manufacturing and selling expenses $925,000 473,000 $ 269,000 111,000 Contribution margin 452,000 158,000 Hountain Bikes $406,000 204,000 202,000 Racing Bikes $ 250,000 158,000 92,000 Fixed expenses: Advertising, traceable 69,300 8,500 40,400 20,400 43,300 20,200 7,900 15,200 115,700 40,500 38,600 36,600 185,000 53,800 81,200 50,000 413,300 123,000 168,100 122,200 $38,700 $35,000 $ 33,900 $ (30,200) 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. 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. mists this question by entering your answers in the tabs below.