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 Dirt Mountain Racing Total Bikes Bikes Bikes $ 925,000 $267,000 $.436, eee $ 252,000 470, eee 113,000 200,000 157,000 455.000 154,00 205,000 95.000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line manager's Allocated common fixed expenses Total fixed expenses Net operating income (loss) 70,600 8,900 40,800 2,900 43,500 20, 100 7,800 15,600 115,500 48,800 38,000 36,70 185, eee 53,480 81,200 50,400 414,600 123,200 167,800 123,600 $ 40, 4ee $ 38, see $ 38,200 $(28,600) "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 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 2 > Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes ONO