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 $268,000 $406,000 $ 253,000 Variable manufacturing and 457,000 113,000 193,000 151,000 selling expenses Contribution margin 470,000 155,000 213,000 102,000 Fixed expenses: Advertising, 69,900 8,600 40,600 20,700 traceable Depreciation of 43,700 20,500 7,700 15,500 special equipment Salaries of product-line 116,400 40,500 39,000 36,900 managers Allocated common fixed expenses* 185,400 53,600 81,200 50,600 Total fixed expenses 415,400 123,200 168,500 123,700 Net operating income $ 54,600 $ 31,800 $ 44,500 $(21,700) (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. 1 Required Required Required 2 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required 1 Required 2 >