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 Racing Bikes . Bikes Sales $ 934,000 $ 270, eee $ 494,000 $ 268,000 Variable manufacturing and selling expenses 478,000 115,000 208,600 155.000 Contribution margin 456,000 155, eee 196.000 105,000 Fixed expenses: Advertising, traceable 68,900 8,300 40,200 20,400 Depreciation of special equipment 43,100 20,400 7,400 15,300 Salaries of product line managers 114,300 40, see 38,400 35,400 Allocated common fixed expenses 186,800 54,000 80.800 52, eee Total fixed expenses 413,100 123,200 166.800 123, 100 Net operating income (loss) $ 42,900 $ 31,800 $ 29, 200 5 (18.100) "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 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes ONO Required 1 Required 2 Required 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. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (los) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)