The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a rac expenses for the past quarter follow: Data on sales and Dir Bikes untain Racin Bikes Sales Variable manufacturing and selling $ 927,000 $266,000 $401,000 260,000 expenses Contribution margin Fixed expenses: 468,000 118,000 199,000 151,000 459,000 148,000 202,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 7,800 116,400 40,900 38,900 185,400 53,200 80,200 415, 800 123,600 167,200 69,800 8,900 40,300 20,600 15,800 36,600 52,000 125,000 44,200 20,600 Total fixed expenses Net operating income (loss) s 43,200 24,400 34,800 $(16,000) 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 Prey 1 of 5 Next