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 Sales $ 925,000 $263,000 $ 404,000 $ 258,000 Variable manufacturing and selling expenses 467,000 111,000 199,000 157,000 Contribution margin 458,000 152,000 205,000 101,000 Fixed expenses: Advertising, traceable 69,900 9,000 40,800 20,100 Depreciation of special equipment 43,800 20,500 7,300 16,000 Salaries of product-line managers 114,200 40,900 38,200 35,100 Allocated common fixed expenses* 185,000 52,600 80,800 51,600 Total fixed expenses 412,900 123,000 167,100 122,800 Net operating income (loss) $ 45,100 $ 29,000 $ 37,900 $(21,800) *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 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial (disadvantage) per quarter Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No Complete this question by entering your answers in the tabs below. Required 1 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) 0 0 0 0 Traceable fixed expenses: Total traceable fixed expenses 0 0 0 O O Product line segment margin (loss) $ O $ O $ 0 Net operating income (loss) $ 0