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 Dirt Mountain Racing Bikes Bikes Bikes 5 924,000 $267,800 $ 485,000 $ 252,000 423,000 112.000 205.000 156,000 451.000 155.000 200.000 96,880 Soles Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipent Salaries of product-line managers Allocated on fixed expenses Total Fixed expenses Net operating income (loss) 69,300 8,200 40,700 20,400 44,000 20,300 3.000 15,700 115,109 40,300 38,800 36,000 184,800 $3.400 1,000 50,400 423,200 122,200 168,500 122,500 $ 37,800 532,300 $ 31,500 $(26,500) "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 Wnat 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 property formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines