The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Sales $925,000 $ 267,000 Variable manufacturing and selling expenses 475,000 Contribution margin 450,000 110,000 157,000 Mountain Bikes $ 406,000 209,000 Racing Bikes $ 252,000 156,000 197,000 96,000 Fixed expenses: Advertising, traceable 70,100 8,500 41,000 20,600 Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) 43,300 20,100 7,800 15,400 115,200 40,900 38,200 36,100 185,000 53,400 81,200 50,400 413,600 122,900 168,200 122,500 $ 36,400 $ 34,100 $ 28,800 $ (26,500) *Allocated on the basis of sales dollars. S 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 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Financial advantage (disadvantage) per quarter