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 Total Bikes Bikes Bikes $ 925,000 $263,000 $ 405,000 $ 257,000 468,000 120,000 197,000 151,000 457,000 143,000 208,000 106,000 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) 69,600 8,400 40,700 20,500 43,700 20,800 7,800 15,100 115, 700 40,600 38,700 36,400 185,000 52,600 81,000 51,400 414,000 122,400 168,200 123,400 $ 43,000 $ 20,600 $ 39,800 $(17,400) *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. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? PO Required 1 Required 2 > Financial (disadvantage) per quarter Financial advantage per quarter Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? OYes O No Required 1 Required 2 Required 3 LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL Prepare a properly formatted segmented income statement that would be more useful to management in a: run profitability of the various product lines........ Totals Dirt Bikes Mountain Bikes Racing Bikes | T | Contribution margin (loss) Traceable fixed expenses: L L L L L L L Total traceable fixed expenses Product line segment margin (loss) Net operating income (loss)