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 $920. 466,000 454.000 Dirt Bikes 262. 115,089 147,00 Mountain Bikes 40.) 194.600 211,000 Racing Bikes $253, 157.699 96.ee 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) 40,780 7.300 38. 69,289 42.800 115.00 184, 411,800 43,000 8,300 20,209 40.800 52,400 121,780 $25,300 20.209 15,380 36,200 se.689 122.380 $(26,300) $ $ 167, 44,000 "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