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) Dirt Total Mountain Racing Bikes Bikes Bikes $929,000 $261,000 $408,000 $ 260,000 479,000 118,000 204,000 157,000 450,000 143,000 204,000 103,000 70,100 8,900 40,500 20,700 43,100 20,200 7,600 15,300 115,800 40,900 38,800 36,100 185,800 52,200 81,600 52,000 414,800 122,200 168,500 124,100 $ 35,200 $ 20,800 $ 35,500 $(21,100) *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 (disadvantage) per quarter < Required 1 Required 2 >