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:

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:

What is the financial advantage $($disadvantage$)$ per quarter of discontinuing the Racing Bikes?

Should the production and sale of racing bikes be discontinued?

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 $2$

Required $3$

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.

$\backslash$table$[[,,$Totals,Dint Bikes,,Mountain Bikes,Racing Bikes$],[$Sales$,,,2,,,],[\backslash$table$[[$Sales$],[$Variable manufacturing and selling expenses$]],],[$Contribution margin $($loss$),,0,,,0,0],[\backslash$table$[[$Contribution margin $($loss$)],[$Traceable fixed expenses:$]],],[\backslash$table$[[$Traceable fixed expenses:$],[$Advertising$,$ traceable$]]],[\backslash$table$[[$Advertising$,$ traceable$],[$Depreciation of special equipment$]]],[\backslash$table$[[$Depreciation of special equipment$],[$Salaries of the product line managers$]]],[$Total traceable fixed expenses,,$0,,0,0,0_{?}$