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 5 934,393 $259,333 $ 469,668 5 256,668 1ii'arialzile manufacturing and selling expenses 42?,886 114,688 265,668 153,668 Contribution margin 457,886 155,688 264,668 93,668 Fixed expenses: Advertising, traceable 69,386 3,288 48,868 28,868 Depreciation of special equipment 44,186 28,288 3,668 15,868 Salaries of productline managers 115,986 48,588 33,568 36,868 Allocated corrliion Fixed expenses* 136,386 53,888 81,868 51,268 Total fixed expenses 415,686 122,288 169,168 124,868 Net operating income (loss) 5 43,433 5 31,399 5 34.939 \"25.5333 *Allocated lCIII'I the DEISIS 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: 'I. 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 protability of the various product lines