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 $921,000 $265,000 $401,000 $ 255,000 Variable manufacturing and 461,000 116,000 190,000 155,000 selling expenses Contribution margin 460,000 149,000 211,000 100,000 Fixed expenses: Advertising, traceable 69,000 8,400 40,100 20,500 Depreciation of special 43,000 20,300 7,400 15,300 equipment Salaries of product-line 115,400 40,700 38,800 35,900 managers Allocated common fixed 184,200 53,000 80,200 51,000 expenses* Total fixed expenses 411,600 122,400 166,500 122,700 Net operating income (loss) $ 48,400 $ 26,600 $ 44,500 $(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 th long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Complete this question by entering your answers in the tabs below. Required Required Required 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) Net operating income (loss)