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 Dikes Bikes Bikes $921,000 $266,000 $ 403,000 $ 252,000 468,000 117,000 199,000 152.000 453,000 149,000 204,000 100,000 Sales Variable manufacturing and selling expenses Contribution margin Tixed expenses Advertising, traceable Depreciation of special equipment Salaries of product line managers Allocated common fixed expenses Total fixed expenses met operating Income (1046) 70,000 9,000 43,400 20,300 114,900 40.000 184,200 53,200 012,500 122,500 $40.500 26,500 40,200 20,800 0.000 15,100 38,500 36,400 10,600 50.400 162,300 122.200 36.700 5(22,700) '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? Required Required 2 > Required 1 Required 2 Required 3 Prepare a properly formatted segmented income statement that would be more useful to management in assessing t run profitability of the various product lines. Totals Dirt Bikes Mountain Racing Bikes Bikes Contribution margin (loss) Traceable fixed expenses: 0 0 0 0 + Total traceable fixed expenses Product line segment margin (loss) 0 0 0 0 0 $ 0 $ 0 $ 0 Net operating income (loss) $ 0