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 $ 931,800 478,000 453,000 Dirt Bikes $ 268,00 118, eee 150,000 Mountain Bikes $ 404,800 200,000 204, eee Racing Bikes $ 259, eee 160, eee 99, eee 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) 68,900 42,800 115,208 186,200 413,100 $ 39,900 8, 4ee 20, 4ee 40, see 53,600 123, 2ee $ 26,800 40,280 7,200 38,200 80,800 166,400 $ 37,600 20,380 15,280 36,280 51,880 123,500 $ (24,500) "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 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No