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 Dirt Bikes 450,000 $ 265,000 116,000 149,000 Mountain Bikes $ 404,000 195,000 209,000 Racing Bikes $ 250,000 158,000 92,000 69,100 8,500 40,400 20,200 43,500 20,500 7,400 15,600 114,700 40,600 38,100 36,000 183,800 53,000 80,800 50,000 411,100 122,600 166,700 121,800 $ 38,900 $ 26,400 $ 42,300 $ (29,800) 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) $ 919,000 469,000 "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 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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. 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 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 qu ter follow: 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) "Allocated on the basis of sales dollars. Total $ 919,000 469,000 Dirt Bikes $ 265,000 116,000 Mountain Bikes $ 404,000 195,000 Racing Bikes $ 250,000 158,000 450,000 149,000 209,000 92,000 69,100 8,500 40,400 20,200 43,500 20,500 7,400 15,600 114,700 40,600 38,100 36,000 183,800 53,000 80,800 50,000 411,100 122,600 166,700 121,800 $ 38,900 $ 26,400 $ 42,300 $ (29,800) 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