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 456,000 $ 261,000 115,000 146,000 212,000 Mountain Bikes $ 405,000 193,000 Racing Bikes $ 258,000 160,000 98,000 68,800 8,300 40,300 20,200 44,200 20,300 7,900 16,000 115,300 40,700 38,200 36,400 184,800 52,200 81,000 51,600 413,100 121,500 167,400 124,200 $ 42,900 $ 24,500 $ 44,600 $ (26,200) Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating Income (loss) $ 924,000 468,000 "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? Financial advantage (disadvantage) per quarter Financial advantage per quarter Required 2 > Should the production and sale of racing bikes be discontinued? Yes No 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 +