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 41,000 20.900 40,200 185.600 10,200 167,300 51.800 122,500 Mountain Total Dirt Bike asken Hacing nie Sales 3.920,000 $ 260,000 5 401,000 $ 259,000 Variable manufacturing and selling expenses 480,000 111.000 209,000 160,000 Contribution margin 440.000 157,000 192,000 99,000 Fixed expenses Advertising, traceable 70,500 0,600 Depreciation of special equipment 43,500 20.100 7.400 16,000 Salaries of product-line managers 115,800 38,700 36,900 Allocated common fixed expenses 53.600 Total Lixed expenses 415,400 125,600 Het operating income (loos) $ 32,600 $14,500 $ 24,700 $ (26,600) "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 i Required 2 Required 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. Totals Dirt Bikes Mountain Bike Racing Bikes 0 0 0 0 Contribution margin (los) Traceable foued expenses 0 0 0 Total traceable fixed expenses Product line segment margin (0) 05 0 5 0 $ 0 Not operating income (10) Total 9.928,000 480,000 448,000 Dirt Bikes $ 268,000 111,000 157,000 Mountain Bikes S 401,000 209,000 192,000 Racing Bikes $ 259,000 160,000 99,000 Sales Variable manufacturing and welling expenses Contribution margin Fixed expenses Advertising, tracenble Depreciation of apecial equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (10) 70,500 43,500 115,800 185,600 415, 400 $ 32,600 8,600 20,100 40,200 53,600 122,500 $ 14,500 41,000 7,400 38,700 80200 167,300 $ 24,700 20,900 16,000 36,900 51.800 125,600 $(26,600) "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 hos no resole 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. Regred 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial (disadvantage) per quarter