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 $ 927,000 $269,000 $ 400,000 $ 258,000 469,000 112,000 204,000 153,000 458,000 157,000 196,000 105,000 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) 69,700 8.500 40,800 20.400 43,600 20,800 7,600 15,200 113,700 40.400 38.100 35,200 185,400 53,800 80,000 51,600 412,400 123,500 166,500 122,400 $ 45,600 $ 33,500 $ 29,500 $(17,400) "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 3 Required 1 Required 2 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes Next > 14 of 20