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 114,200 Mountain Total Dirt Bike Bikes Racing Bikes Sales $924,000 $ 269,000 5404,000 5 255,000 Variable manufacturing and selling expenses 419.000 117,000 205,000 157,000 Contribution margin 445.000 148,000 199,000 98,000 Fixed expenses Advertising, traceable 69,300 8.200 40,200 20,900 Depreciation of special equipment 43.800 20,700 7,800 15,300 Salaries of product-line manager 40,400 38,300 35,500 Allocated conton fixed expenses 184,800 53,000 30.000 51.000 Total fixed expenses 412, 100 122,300 162.100 122,700 Net operating income (los) $ 32,900 5 25.700 $ 31,900 5 (24,700) "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 ossessing the long run profitability of the various product lines. ces Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes O No Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the lor profitability of the various product lines. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 Contribution margin (loss) Traceable fixed expenses: 0 0 0 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 0 $ 0 $ 0 $ 0 Net operating income (loss) $ 0