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 $409,000 197,000 212,000 Racing Bikes $ 252,000 156,000 96,000 Total $ 928,000 472,000 456,000 Dirt Bikes $267,000 119,000 148,000 69,500 8,600 40,700 20,200 44,200 20,600 7,800 15,800 115,400 40,900 38,300 36,200 185,608 53,400 81,800 50,400 414,700 123,500 168,600 122,600 $ 41,300 $24,500 $ 43,400 $ (26,600) 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. Check my work