The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes Sales 5; 918,666 $263,666 $ 499,999 $ 255,999 Variable manufacturing and selling expenses 463,666 111,666 196,666 156,666 Contribution margin 455,666 152,666 264,666 99,666 Fixed expenses: Advertising, traceable 68,866 8,266 46,366 26,366 Depreciation of special equipment 44,166 26,266 8,666 15,966 Salaries of productline managers 114,666 46,266 38,366 36,166 Allocated common fixed expenses* 183,666 52,666 86,666 51,666 Total fixed expenses 411,166 121,266 166,666 123,366 Net operating income (1055) $ 43,966 $ 36,866 $ 37,466 $(24,366) *Allocated on the basis of sales dollars. 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 vaiue 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 longrun 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? inancial (disadvantage) per quarter _ Required 2 > Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long- run protability of the various product lines. } l Contribution margin (loss) 0 0 0 0 Traceable fixed expenses: I y > Total traceable xed expenses 0 O O 0 Product line segment margin (loss) 0 $ 0 $ 0 $ 0 'l=== Net operating income (loss) :5 0 inancial (disadvantage) 'u ,,,,,,,,,,,,,,,,,,,,,,,,,,, ii Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the nancial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? [Financial advantage