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: points Dirt Mountain Racing Total Bikes Bikes Bikes $ 921,000 $267,000 $ 401,000 $ 253,000 455,000 112,000 193,000 150,000 466,000 155,000 208,000 103,000 eBook Hint 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) Print 69,900 8,500 40,700 20,700 43,800 20,300 7,800 15,700 115,500 40,500 38,800 36,200 184,200 53,40080, 20050, 600 413, 400 122,700 167,500 123,200 $ 52,600 $ 32,300 $ 40,500 $(20, 200) References *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? Financial advantage per quarter 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 0 0 0 0 Contribution margin (loss) Traceable fixed expenses: | Total traceable fixed expenses | 0 0 0 $ $ $ 0 Net operating income (loss) $ ( Required 2 Required 3 )