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. $ 922,000 470,000 $ 269,000 117,000 Mountain Bikes $ 402,000 Racing Bikes 452,000 152,000 199,000 203,000 $ 251,000 154,000 97,000 69,100 8,500 40,400 20,200 42,900 20,300 7,200 15,400 115,100 40,300 38,800 36,000 184,400 53,800 80,400 50,200 411,500 122,900 166,800 121,800 $ 40,500 $29,100 $ 36,200 5 (24,800) 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