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 5 927,000 468, sae 459, Dirt Bikes $267,98 114, cae 153,00 Mountain Bikes $ 482,00 197,eee 205, Racing Bikes $ 250.000 157, eee 101.ee 40,300 8,0 Variable manufacturing and selline expenses Contribution margin Fixed expenses Advertising traceable Depreciation of special equipment Salaries of product line managers Allocated common fixed expenses Total fixed expenses Ivet operating incon (los) 69,880 43,588 115,480 185,488 414,100 44.900 8.780 20,200 48,1ee 53, 4e8 122,408 39.60 Ba, 4ae 167,2ee 37.ee 20, 15,300 16.se 51,600 1 24,500 $(23,5ae) $ $ '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