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 $ 925,000 462,000 463,000 Dirt Mountain Racing Bikes Bikes $264.000 $ 403 000 $ 258,000 111,000 197.000 154,000 153,000 206,000 104,000 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 Net operating income (loss) 69,100 8,500 40,200 20,400 43,500 20,400 7,300 15,800 114,200 40,000 38.000 36,200 185,000 52,800 80,609 51,600 411,800 121,700 166, 199 124.000 51,200 $ 31,300 $39.900 $(20,000) $ "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. Required i Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Financial (disadvantage) per quarter . Totals Dirt Bikes Mountain Bikes Racing Bikes 000 Contribution margin (loss) Traceable fixed expenses lol I 0 0$ Total traceable fixed expenses Product line segment margin (loss) 0 Net operating income (loss)