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 $ 932,000 Dirt Bikes 481,000 451,000 $ 266,000 114,000 152,000 Mountain Bikes $ 409,000 210,000 199,000 Racing Bikes $ 257,000 157,000 100,000 69,800 8,800 40,300 20,700 43,800 20,300 7,700 15,800 114,200 40,200 38,800 35,200 186,400 53,200 81,800 414,200 122,500 168,600 51,400 123,100 $ 36,800 $ 29,500 $ 30,400 $ (23,100) 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?