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 $ 917,000 $266,000 $ 401,000 $ 250,000 466,000 118,000 191,000 157,000 451,000 148,000 210,000 93,000 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) 69,500 8,300 40,300 20,900 43,300 20,100 7,300 15,900 114,700 40,500 38,700 35,500 183,400 53,200 80,200 50,000 410,900 122, 100 166,500 122,300 $ 40,100 $ 25,900 $ 43,500 $ (29,300) *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. Answer is not complete. 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 Required 1 Required 2 > Answer is not complete. 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 S 917,000 466,000 451,000 Dirt Bikes $ 266,000 118,000 148,000 Mountain Bikes $ 401,000 191,000 210,000 Racing Bikes $ 250,000 157,000 93,000 Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses: Advertising Depreciation of special equipment Salaries of the product line managers Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (loss) 69,500 43,300 114,700 227,500 223,500 8,300 20,100 40,500 68,900 $ 79,100 40,300 7,300 38,700 86,300 123,700 20,900 15,900 35,500 72,300 20,700 $ $ S 223,500