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 Sales $ 925,000 $264,000 $ 407,000 $ 254, eee Variable manufacturing and selling expenses 480,eee 118,000 204,000 158,00 Contribution margin 445,000 146,000 203,000 96,000 Fixed expenses Advertising, traceable 69,100 8,800 40,200 20,100 Depreciation of special equipment 44,100 20,700 7,900 15,500 Salaries of product-line managers 114,700 40,100 38,600 36,000 Allocated common fixed expenses 185,000 52,800 81,400 50.800 Total fixed expenses 412,900 122,400 168 100 122,400 $ 32,100 $ 23,600 $ 34,900 $(26,400) 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. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Should the production and sale of racing bikes be discontinued? Yes O No 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 Bike Racing Bikes Contribution margin (loss) Traceable foxed expenses Total traceable foxed expenses Product line segment margin (loss) Net operating income (loss)