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 Mountain Bikes Racing Bikes $ $ Sales 919,000 261,000 404,000 254,000 Variable manufacturing and 457,000 selling expenses Contribution margin 111,000 193,000 462,000 150,000 211,000 101,000 153,000 Fixed expenses: Advertising, traceable 70,400 Depreciation of special 43,900 9,000 40,500 20,800 20,900 7,700 15,400 equipment Salaries of product-line 115,200 40,700 38,400 36,100 managers 183,800 52,200 80,800 50,800 413,300 122,700 167,400 123,200 $ (22,200) Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. $ 48,700 $ 27,300 $ 43,600 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 Required Required 1 2 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial advantage (disadvantage) per quarter < Required 1 $ (70,900) Required 2 > Complete this question by entering your answers in the tabs below. Required Required Required 2 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: Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 Total traceable fixed expenses Product line segment margin (loss) 0 0 0 0 0 $ 0 $ 0 $ 0 Net operating income (loss) $ 0 < Required 2 Required 3 >