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 Total Dirt Bikes Bikes Racing Bikes Sales $ 935,000 $ 267,000 $ 409,000 $ 259,000 Variable manufacturing and selling expenses 473,000 116,080 201,000 156,000 Contribution margin 462,000 151,000 208,000 103,000 Fixed expenses: Advertising, traceable 69,100 8,200 40,400 20,500 Depreciation of special equipment 44,500 20,800 7,800 15,900 Salaries of product-line managers 115,500 40,500 38,990 36,100 Allocated common fixed expenses 187,000 53,400 81,800 51,800 Total fixed expenses 416, 100 122.900 168,980 124,300 Net operating incone (loss) $ 45,900 $ 28, 108 $ 39,100 $ (21,300) *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 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 > Drau of 8 Next > Should the production and sale of racing bikes be discontinued? Yes O No Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-rum 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 (los) Net operating income (los)