The Regal Cycle Company manufactures three types of bicycle--a dirt bike, a mountain bike, and a racing bike Data on sales and expenses for the past quarter follow 40,600 185,000 169,200 Mountain Total Dirt Bikes Bikes Racing Bikes Sales $ 925,000 $ 267,000 $400,000 $ 250,000 Variable manufacturing and selling expenses 425,000 112,000 207.000 156,899 Contribution margin 450, cee 155,000 201,000 94,000 Fixed expenses Advertising, traceable 69,900 8,300 40,900 20,700 Depreciation of special equipment 44,100 20, Bee 7,300 15,500 Salaries of product-line managers 115,200 38,900 35,700 Allocated common fixed expenses 53,400 81,600 50,000 Total fixed expenses 414,200 123 100 121,900 Net operating income (loss) $ 35,800 $ 31,900 $ 31,800 $ 27,900) "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) por quantor He Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No w Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the lor profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 Contribution margin (0) Traceable fixed expenses 0 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 $ 0 $ 0 $ 0 Net operating income (loss) $ 0