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 $927,000 $269,000 $403,000 $ 255,000 Variable manufacturing and 464,000 117,000 196,000 151,000 selling expenses Contribution margin 463,000 152,000 207,000 104,000 Fixed expenses: Advertising, 69,200 8,300 40,500 20,400 traceable Depreciation of 44,700 20,900 7,800 16,000 special equipment Salaries of product-line 116,000 40,600 38,900 36,500 managers Allocated common fixed expenses* 185,400 53,800 80,600 51,000 Total fixed expenses 415,300 123,600 167,800 123,900 Net operating income $ 47.700 $ 28.400 $ 39,200 $(19,900) (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. Complete this question by entering your answers in the tabs below. Required Required Required 1 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Nequi eu | Neyull eu|| Neyull eu should the production and sale of racing bikes be discontinued? Should the production and sale of racing bikes be discontinued? O Yes ONO Required Required Required | 2 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 Net operating income (loss)