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 Bikes $264, 000 120,000 144,000 Mountain Bikes $ 406,000 205,000 201,000 Racing Bikes $ 259,000 155,000 104,000 Total Sales $ 929,000 Variable manufacturing and selling expenses 480,000 Contribution margin 449,000 Fixed expenses: Advertising, traceable 69, 800 Depreciation of special equipment 43,600 Salaries of product-line managers 114, 800 Allocated common fixed expenses* 185, 800 Total fixed expenses 414,000 Net operating income (loss) $ 35,000 40, 600 7,400 8,300 20, 700 40, 800 52, 800 122, 600 $ 21, 400 20,900 15,500 38, 600 35, 400 81,200 51, 800 167, 800 123, 600 33,200 $(19,600) 11 $ *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 $ (4,100)| (Required 1 Required 2 >