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 Bikes Bikes Bikes Total $921,000 $269,000 $ 402,000 $ 250,000 Sales Variable manufacturing and selling 466,000 114,000 202,000 150,000 expenses Contribution margin Fixed expenses: 455,000 155,000 200,000 100,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses 69,500 44,300 115,100 184,200 20,200 15,900 36,400 8,900 20,500 40,100 40,400 7,900 38,600 80,400 167,300 53,800 123,300 50,000 122,500 $41,900 $ 31,700 $ 32,700 $(22,500) 413,100 Net operating income (loss) *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 1 Required 2