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 Pixed 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 $930,000 470,000 264,000 118,000 Mountain Bikes $409,000 194,000 Racing Bikes $ 257,000 158,000 460,000 146,000 215,000 99,000 69,000 8,100 40,500 20,400 44,000 20,700 7,900 15,400 115,700 40,900 38,200 36,600 186,000 52,800 81,800 51,400 414,700 122,500 168,400 $ 45,300 $ 23,500 5 46,600 123,000 5 (24,000) 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 31 Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run Next >