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: Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Total fixed expenses Allocated common fixed expenses Net operating income (loss) "Allocated on the basis of sales dollars. Total Dirt Bikes $ 931,000 467,000 464,000 $ 265,000 112,000 153,000 Mountain Bikes $ 406,000 205,000 Racing Bikes $ 260,000 201,000 150,000 110,000 69,300 8,700 40,200 20,400 43,700 20,700 7,600 15,400 114,100 40,700 38,400 35,000 186,200 53,000 81,200 413,300 123,100 167,400 52,000 122,800 $ 50,700 $29,900 $ 33,600 $ (12,800) 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 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. Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses: Advertising, traceable Salaries of the product line managers Depreciation of special equipment Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (loss) $ Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 $ 0 $ 0 $