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 $ 930,000 477,000 453,000 Mountain Dirt Bikes Bikes $ $ 269,000 404,000 114,000 208,000 155,000 196,000 Racing Bikes $ 257,000 155,000 102,000 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) 69,200 44,200 8,200 20,900 40,900 7,500 20, 100 15,800 114,600 40,100 38,400 36, 100 186,000 414,000 53,800 123,000 80, 800 167,600 51,400 123,400 $ (21,400) $ 39,000 $ 32,000 $ 28,400 *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. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required Required Required 1 2 3 Should the production and sale of racing bikes be discontinued? Yes ONO Required Required Required 1 2 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. Mountain Racing Totals Dirt Bikes Bikes Bikes Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)