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: Dirt Mountain Racing Total Bikes Bikes Bikes $ 921,000 $267,000 $ 403,000 $ 251,000 475,000 115,000 208,000 152,000 446,000 152,000 195,000 199,000 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) 09.300 8,300 40,400 20,600 43,200 20,300 17,300 1 15,600 113,700 40,500 38, 100 35,100 184,200 53,400 180,600 150,200 410,400 122,500 166,400 121,500 $ 35,600 $ 29,500 $ 28,600 $(22,500) "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? Financial (disadvantage) per quarter Required 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of the product line managers 0 0 $ 0 $ Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (loss)