The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 925,000 $ 262,000 $ 404,000 $ 259,000 Variable manufacturing and selling expenses 467,000 116,000 195,000 156,000 Contribution margin 458,000 146,000 209,000 103,000 Fixed expenses: Advertising, traceable 69,000 8,200 40,100 20,700 Depreciation of special equipment 44,400 21,000 7,900 15,500 Salaries of product-line managers 115,000 40,700 38,700 35,600 Allocated common fixed expenses* 185,000 52,400 80,800 51,800 Total fixed expenses 413,400 122,300 167,500 123,600 Net operating income (loss) $ 44,600 $ 23,700 $ 41,500 $ (20,600) *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 2Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2>