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 Dirt Mountain Racing Total Bikes Bikes Bikes $930,000 $269,000 $ 402,000 $ 259,000 471,080 113,000 280,000 158,000 459,800 156,000 282,000 101,000 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 Het operating income (loss) 69,900 43,689 8,300 20,500 41,000 7,400 2e, 600 15,700 115,480 40,100 38,700 36,600 186,820 53,800 414,90 122,700 $ 44,100 $ 33,300 $ 80,400 51,800 167,500 124,700 34,500 $(23,700) "Alocated 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 property formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the vanous product lines Complete this question by entering your answers in the tabs below 1 Required 2 Required Show