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: Mountain Dirt Racing Total Bikes Bikes Bikes $ 410,000 $ 258,000 930,000 Sales $262,000 Variable manufacturing and selling 464,000 194,000 113,000 157,000 expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses 149,000 466,000 216,000 101,000 40,500 7,700 38,600 69,300 8,400 20,500 20,400 15,700 36,900 51,600 124,600 43,900 115,700 186,000 40,200 52,400 121,500 82,000 168,800 414,900 51,100 $ 27,500 $47,200 $ (23,600) Net operating income (loss) *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 2 Required 1 Required 3 ... ...... ..... ..... ...... ..... ...... ................ .... ... ... ...... What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 Required 1 Required 3 Should the production and sale of racing bikes be discontinued? 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) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)