The Regal Cycle Company manufactures three types of bicycles-adike, 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 $929,000 $263,000 $406,000 $ 260,000 Variable manufacturing and 471,000 114,000 201,000 156,000 selling expenses Contribution margin 458,000 149,000 205,000 104,000 Fixed expensest Advertising, 70,100 traceable 2,900 40,300 20,900 Depreciation of special 43,400 20,700 7,500 15,200 equipment Salaries of product-line 114,700 40,100 38,500 36,100 managers Allocated common 185,800 52,600 fixed expenses. 81,200 52,000 Total fixed 414,000 122,300 167,500 124,200 expenses Net operating $ 44,000 $ 26,700 $ 37,500 $(20,200) income (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 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? - Required Required 2 >