The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales 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 $ 923,000 Dirt Bikes Mountain Bikes Racing Bikes $ 262,000 $ 401,000 $ 260,000 478,000 119,000 200,000 159,000 445,000 143,000 201,000 101,000 69,800 8,900 40,700 20,200 44,000 20,500 7,700 15,800 114,400 40,400 38,300 35,700 184,600 52,400 80,200 52,000 412,800 122,200 166,900 123,700 $ 32,200 $ 20,800 $ 34,100 $ (22,700) Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear o 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 profitability of the various product lines. Answer is not complete. 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 $ (22,700)