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) Mountain Bikes $ 409,000 196,000 213,000 Racing Bikes $ 257,000 154,000 103,000 Total $ 931,000 465,000 Dirt Bikes 466,000 $ 265,000 115,000 150,000 69,500 8,200 40,800 20,500 43,300 20,800 7,400 15,100 113,200 40,100 38,000 35,100 186,200 53,000 81,800 51,400 412,200 122,100 168,000 122,100 $ 53,800 $ 27,900 $ 45,000 $ (19,100) *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 >