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: Total $ 935,000 467,000 468,000 Dirt Bikes $ 269,000 118,000 151,000 Mountain Bikes $ 406,000 197,000 209,000 Racing Bikes $ 260,000 152,000 108,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Located common ixed expenses* Total fixed expenses Net operating income (loss) 69,000 43,700 113,800 187,000 413,500 $ 54,500 8,100 20,300 40,300 53,800 122,500 $ 28,500 40,600 7,700 38,400 81,200 167,900 $ 41,100 20,300 15,700 35,100 52,000 123,100 $ (15,100) *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: 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. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 > Financial advantage (disadvantage) per quarter Financial advantage per quarter Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? OYes No 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 Bikes Racing Bikes Contribution margin (loss) 0 0 0 0 Traceable fixed expenses: Total traceable fixed expenses 0 0 0 0 Product line segment margin (loss) 0 $ 0 $ 0 $ 0 Net operating income (loss) $ 0