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. Dirt Bikes $265,000 118,000 Mountain Bikes $ 408,000 Racing Bikes $252,000 Total $925,000 480,000 206,000 156,000 445,000 147,000 202,000 96,000 69,000 8,400 40,300 20,300 43,000 20,000 7,200) 15,800 115,500 41,000 38,200 36,300 185,000 53,000 81,600 50,400 413,300 123,200 167300 122,800 $31,700 $23,000 $34,700 $ (26,000) Check my work 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 advantage (disadvantage) per quarter