The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: 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) *Allocated on the basis of sales dollars. Total $ 936,000 Dirt Bikes 470,000 466,000 $ 270,000 120,000 150,000 Mountain Bikes $ 410,000 193,000 217,000 Racing Bikes $ 256,000 157,000 99,000 69,400 8,700 40,400 20,300 43,300 20,500 7,600 15,200 114,800 40,200 38,300 36,300 187,200 54,000 82,000 51,200 414,700 123,400 168,300 123,000 $ 51,300 $ 26,600 $ 48,700 $ (24,000) 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?