The Regal Cycle Company manufactures three types of bicycles-a dirt blke, a mountain blke, and a racing blke. Data on sales and expenses for the past quarter follow Dirt Mountain Racing Bikes Bikes Bikes 253,eee Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: $ 927 , eee 467,888 $267,000 $ 487 , eee 111,808 285,880 ,808 282,888 $ 51,888 182,88 468.888 156.998 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 8,188 42,800 20,308 114,488 48,300 185,488 53,408 188 69,308 48,608 7,188 38, 288 81,488 308 28,688 15,488 35,968 58,688 500 Total fixed expenses Net operating income (loss) 411,988 $ 48,108 33,908 34,788 (28,588) 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 speclal 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 discontinulng the Racing Blkes? 2. Should the production and sale of racing blkes be discontinued? 3. Prepare a properly formatted segmented Income statement that would be more useful to management In assessing the long-run profitabllity of the varlous product lines. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Should the production and sale of racing bikes be discontinued? OYes ONo 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 (loss) Traceable fixed expenses: Total traceable fixed expenses Product line segment margin (loss 0S Net operating income (loss)