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 $914,000 $261,000 $400,000 $ 253,000 474,000 117,000 205,000 152,000 440,000 144,000 195,000 101,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) 69, 700 8,300 40,600 20,800 43,000 20, 200 7,600 15, 200 115,000 40,300 38,700 36,000 182,800 52,200 80,000 50,600 410,500 121,000 166,900 122,600 $ 29,500 $ 23,000 $ 28,100 $(21,600) *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 nrofitabilitu af the variarir nraduiet linar 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 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Financial (disadvantage) per quarter 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 914,000 $ 261,000 $ 400,000 $ 253,000 474,000 119,000 200,000 155,000 440,000 142,000 200,000 98,000 Sales Variable manufacturing and selling expenses Contribution margin (loss) Traceable fixed expenses: Depreciation of special equipment Salaries of the product line managers Salaries of the product line managers Total traceable fixed expenses Product line segment margin (loss) Common fixed expenses Net operating income (loss) 70,200 43,100 114,500 227,800 212,200 $ 8,900 20,700 40,500 70,100 71,900 $ 40,600 7,200 38,200 86,000 114,000 $ 20,700 15,200 35,800 71,700 26,300 $ 212,200