The Regal Cycle Company manufactures three types of bleycles--a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow. Mountain Total Dirt Bikes Bikes Racing Bikes Sales $930,000 264,000 $ 409.000 5.257.000 variable manufacturing and selling expenses 464.000 115,000 196,000 153,000 Contribution margin 466.000 149,000 213,000 104,000 Fixed expenses Advertising. traceable 69,100 8.100 40,500 20.500 Depreciation of special equipment 43,500 21,000 7,200 15,300 Salaries of product-line managers 115.700 40,700 38,100 36.900 Allocated common fixed expenses. 186.000 52,800 01.800 51,400 Total tixed expenses 416.300 122 600 167.600 124,100 Net operating income (los) 5 51,700 $ 26,400 $ 45,400 $ (20, 100) "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 property formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Required 1 Required 2 Required 3 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? Required Required 2 > Required 1 Required 2 Required a 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 Bike Racing Bikes Contribution margin (0) Traceable fixed expenses Total traceable fixed expenses Product line segment margin (loss) Net operating income (los) (Required 2