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: 110,000 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) Dirt Mountain Racing Total Bikes Bikes Bikes $ 916,000 $265,000 $400,000 $ 251,000 466,000 202,000 154,000 450,000 155,000 199,000 97,000 69,300 8,300 40,500 20,500 44,100 20,400 7,900 15,800 115,400 40, 800 38,200 36,400 183,200 53,000 80,000 50,200 412,000 122,500 166,600 122,900 $ 39,000 $ 32,500 $ 31,400 $(25,900) *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 (disadvantago) per quarter