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:

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 Hhuntain Racing motel Bikes Bikes Bike: Sales $924,000 $269,000 $405,000 $ 250,000 Variable manufacturing and selling 477,000 113.000 200,000 159,000 expenses Contribution margin 447,000 151,000 205,000 91,000 Fixed expenses: Advertising, traceable 69,000 8,700 40,300 20,900 Depreciation of special equipment 43,300 20,000 7,200 15,300 Salaries of product-line managers 116,100 40,000 33,700 36,600 Allocated common fixed expenses* 104,000 53,000 01,000 50,000 Total fixed expenses 414,100 124,100 167,200 122,000 Net operating income (loss) $ 32,900 $ 26,900 $ 37,000 $[31,000) *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 value and does not wear out. Required: '|. 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 thatwould 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 helew. Required 1 Required 2 Required 3 What is the Financial advantage {disadvantage} per quarter of discontinuing the Racing Bikes? Financial (disadvantage) per quarter Financial advantage per quarter x Answer is not complete. 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. Totals Dirt Bikes Mountain Racing Bikes Bikes Sales $ 924,000 IS 269,000 $ 405,000 $ 250,000 Variable manufacturing and selling expenses 477,000 118,000 200,000 152,000 x Contribution margin (loss) 447,000 151,000 205,000 98,000 Traceable fixed expenses: Depreciation of special equipment 50 X 8,800 Salaries of the product line managers 69,300 X 20,400 X Advertising, traceable 69,300 X 40,500 X Total traceable fixed expenses 138,650 69,700 0 0 Product line segment margin (loss) 308,350 $ 81,300 $ 205,000 98,000 Common fixed expenses 411,900 X Net operating income (loss) $ (103,550)