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 Din Hout 300,000 $0.00 $ 150,00 $ 60,000 130,00 27.000 60,000 33. 150,00 53.000 90,000 27,00 Variable manufacturinting expenses Contribution Fixed expenses Advertising traceable Depreciation of specialment Salaries of product-line managers Allocated conified expenses Total fled expenses 30,000 10,000 14.00 6,000 2 23.000 6,000 9,000 3.000 35,00 12.00 13,000 10,000 60.00 18.000 38.000 123000 148.00 46, 66,000 16,000 532,000 5 17,000 $24,000 $(9,00 Net operating income (los) 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