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: Total $ 925,000 468,000 457.000 Dirt Mountain Racing Bikes Bikes Bikes $264,000 S 404,000 $257.000 117,000 193,000 158,000 147,000 211,000 99.000 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) 70.400 44,800 113,900 185,000 414,100 $ 42,900 8.800 40,600 21,000 7,900 40,200 38.000 52,800 80,800 122,800 167,300 $ 24,200 $ 43,700 21.000 15,900 35,700 5 1.400 124,000 (25,000) "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