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 Dirt Bikes, $ 926,000 459,000 $ 262,000 110,000 Mountain Bikes $ 405,000 Racing Bikes $ 259,000 198,000 467,000 152,000 207,000 151,000 108,000 69,400 8,600 40,200 20,600 43,900 20,900 7,700 15,300 115,200 40,900 38,800 35,500 185,200 52,400 81,000 51,800 413,700 122,800 167,700 123,200 $ 53,300 $ 29,200 $ 39,300 $ (15,200) 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