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 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 Dirt Bikes Mountain Bikes Racing Bikes $919,000 $266,000 $ 403,000 $250,000 480,000 120,000 201,000 159,000 439,000 146,000 202,000 91,000 70,400 9,000 40,600 20,800 43,900 20,700 7,900 15,300 114,800 40,900 38,400 35,500 183,800 53,200 80,600 50,000 412,900 123,800 167,500 121,600 $ 26,100 $ 22,200 $ 34,500 $(30,600) 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. 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 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1 Required 2 > Complete this question by entering your answers in the tabs Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes ONO No Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in a run profitability of the various product lines. Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss) Totals Dirt Bikes Mountain Bikes Racing Bikes + 0 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 0