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: 53 ces 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 $ 926,000 453,000 Dirt Bikes $ 267,000 Mountain Bikes $ 402,000 Racing Bikes $ 257,000 111,000 190,000 473,000 156,000 212,000 152,000 105,000 69,500 8,600 40,800 20,100 43,700 20,800 7,700 15,200 115,700 40,700 38,100 36,900 185,200 53,400 80,400 51,400 414,100 123,500 167,000 123,600 $ 58,900 $ 32,500 $ 45,000 $ (18,600) 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 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. Contribution margin (loss) Traceable fixed expenses: Totals Dirt Bikes Mountain Bikes Racing Bikes