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 $ 928,000 $ 266,000 $ 409,000 $ 253,000 Variable manufacturing and selling expenses 485,000 119,000 209,000 157,000 Contribution margin 443,000 147,000 200,000 96,000 Fixed expenses Advertising, traceable 69,000 8,500 40,200 20,300 Depreciation of special equipment 43,300 20,300 7,300 15,700 Salaries of product-line managers 114,300 41,000 38,300 35,000 Allocated common fixed expenses 185,600 53,200 81,800 50,600 Total fixed expenses 412,200 123,000 167,600 121.600 Net operating income (loss) $ 30,800 $ 24,000 $ 32,400 $ (25,600) "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? 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 $ 928,000 485,000 443,000 Dirt Bikes $ 266,000 119,000 147,000 Mountain Bikes $ 409,000 209,000 200,000 Racing Bikes $ 253,000 157,000 96,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 69,000 43,300 114,300 185,600 412,200 $ 30,800 8,500 20,300 41,000 53,200 123,000 $ 24,000 40,200 7,300 38,300 81,800 167,600 $ 32,400 20,300 15,700 35,000 50,600 121,600 $ (25,600) *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 Should the production and sale of racing bikes be discontinued? Yes No 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 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 experyses: Total traceable fixed expenses Product line segment margin (los) Net operating income (los)