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 Total $929,800 483.000 446,800 Dirt Bikes $ 269, eee 117.000 152,000 Mountain Bikes $ 407, ene 210.000 197.000 Racing Bikes $ 253,000 156,000 97.000 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) 69,800 43,900 115,500 185, Bee 415.000 $31.000 8,500 20,000 40,400 53, see 123,500 5 28,500 40,400 7,800 38,100 81,400 167.700 5.29, 300 20,900 15,300 37.000 50,600 123.800 5 (26,820) "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 property formatted segmented income statement that would be more useful to management in assessing the long run profitability of the various product lines