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: Contribution margin Fixed expenses: Total Dirt Bikes Sales $930,000 $ 267,000 Variable manufacturing and selling expenses 458,000 114,000 472,000 153,000 Mountain Bikes $ 409,000 192,000 217,000 Racing Bikes $ 254,000 152,000 102,000 Advertising, traceable 69,500 8,700 40,200 20,600 44,100 21,000 7,700 15,400 115,900 40,900 38,200 36,800 186,000 53,400 81,800 50,800 415,500 124,000 167,900 123,600 $ 56,500 $ 29,000 $ 49,100 $ (21,600) Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses 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. 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 advantage (disadvantage) per quarter Financial advantage per quarter Required 2 > 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. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss). Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 < 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. Advertising, traceable Common fixed expenses Depreciation of special equipment Salaries of the product line managers Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 0 0 0 0 0 0 $ 0 $ $ 0 $ 0 < Required 2 Requ Common fixed expenses Depreciation of special equipment Salaries of the product line managers Sales Variable manufacturing and selling expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bik EA $ < Required 2 0 0 0 $ 0 Requir