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: 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 $ 920,000 477,000 Dirt Bikes $ 263,000 111,000 Mountain Bikes $ 402,000 Racing Bikes $ 255,000 443,000 152,000 206,000 196,000 160,000 95,000 69,800 8,800 40,200 20,800 43,800 20,500 7,900 15,400 114,800 40,400 38,600 35,800 184,000 52,600 80,400 51,000 412,400 122,300 167,100 123,000 $ 30,600 $ 29,700 $ 28,900 $ (28,000) 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 Should the production and sale of racing bikes be discontinued? Yes No < Required 1 Required 3 >