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 $ 922,000 472,000 450,000 Dirt Mountain Racing Bikes Bikes Bikes $263,00 $ 405,000 $ 254, eee 111,eee 209.eee 152,eee 152,200 196,eee 182.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) 69,600 43,400 115,600 184,400 413.000 37,800 8,182 40,600 20,9ee 20,782 7,300 15,4ee 40,5ee38,200 36,900 52,6ee 8 1, 50,888 121,90e 167, 100 124, eee $ 39,18 $ 28,900 $(22, eee) $ "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 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? 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) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)