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 ales Variable manufacturing and selling expenses Total 5 920,000 482.000 446,000 Dirt Bike $ 270,000 119.000 151,000 Mountain nike 5 402,000 210.000 192,000 Racing Riko 6256,000 152.000 103.000 as 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 (lons) 70,600 43,300 114,200 185,600 413,700 32,300 8.700 20,500 40.700 54.000 123,900 $ 27.100 41.000 7.600 38,300 80,400 162.300 $ 24,700 20,900 15,200 35,200 51.200 122.500 5 (19,500) "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