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: Mountain Racing Bikes Total Dirt bikes Bikes Sales $927,000 $ 267,000 $ 406,000 $ 254,000 Variable manufacturing and selling expenses 483,000 119.000 209,000 155,000 Contribution margin 444.000 148,000 197.000 99,000 Tixed expenses Advertising, traceable 69,500 8,100 40.600 20,800 Depreciation of special equipment 43,400 20,500 7.300 15,600 Salaries of product-line managers 114,300 40,400 38,800 35.100 Allocated common fixed expenses 185,400 53,400 81,200 50.800 Total fixed expenses 412,600 122,400 167.900 122,300 Net operating income (lon) $ 31,400 3 25,600 $ 29,100 $ (23,300) "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 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? S Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No Required 1 Required 2 Required 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable foxed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating Income (loss)