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: Mountain Total Dirt Bikes Bikes Racing Bikes Sales $ 915,000 $ 262,000 $ 400,000 $ 253,000 Variable manufacturing and selling expenses 478,000 117,000 205,000 156,000 Contribution margin 437,000 145,000 195,000 97,000 Fixed expenses: Advertising, traceable 69,800 8,600 40,500 20,700 Depreciation of special equipment 43,800 20,300 7,900 15,600 Salaries of product-line managers 115,900 40,400 38,900 36,600 Allocated common fixed expenses* 183,000 52,400 80,000 50,600 Total fixed expenses 412,500 121,700 167,300 123,500 Net operating income (loss) 5 24,500 $ 23,300 $ 27,700 $ (25.500) "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: 14 What is the nancial 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. Q Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the nancial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial advantage (disadvantage) per quarter 9 $ 17,600 6 Required 2 >