What is the financial advantage $($disadvantage$)$ per quarter of discontinuing the Racing Bikes? $\backslash$table$[[,,$Totals,Dirt Bikes,$\backslash$table$[[$Mountain$],[$Bikes$]],\backslash$table$[[$Racing$],[$Bikes$]]],[$Sales$,(,923,000$vv$,$$$,266,000,404,000,$$$,253,000],[$Variable manufacturing and selling expenses,$(2),467,000$vv$,115,000,193,000$vv$,,159,000$vv$],[$Contribution margin $($loss$),,456,000,151,000,211,000,,94,000],[$Traceable fixed expenses:$],[$Advertising$,$ traceable,$($V$),69,700$vv$,8,700,40,800,,20,200$vv$],[$Depreciation of special equipment,$(,43,700$vv$,20,800$vv$,7,400$vv$,,15,500],[$Salaries of the product line managers,$(,114,800,40,800,38,800,,35,200$vv$],[$Total traceable fixed expenses,,$228,200,70,300,87,000,,70,900],[$Product line segment margin $($loss$),,227,800,80,700,124,000,$$$,23,100],[$Common fixed expenses,$(2),412,800\backslash$times $,,,,],[$Net operating income $($loss$),,$$$,(185,000),,,,]]$ The Regal Cycle Company manufactures three types of bicycles$-$a dirt bike, a mountain bike, and a racing bike. Data on sales and

Required $3$ s for the past quarter follow:

$*$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 no

the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out.

Required:

What is the financial advantage $($disadvantage$)$ per quarter of discontinuing the Racing Bikes?

Should the production and sale of racing bikes be discontinued?

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.