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: Total $ 918,000 472.000 446,000 Dirt Bikes $ 261,000 116,000 145,000 Mountain Bikes $ 405,000 203,000 202,000 Racing Bikes $ 252,000 153,000 99.000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated connon fixed expenses Total fixed expenses Net operating income (10) 69,300 43,900 115,700 183,600 412.500 $ 3,500 8,400 20,700 40,800 52,200 122, 100 $ 22,900 40,700 7.300 38,200 81,000 167,200 $ 34,800 20,200 15,900 36,700 50,400 123,200 $ (24,200) "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 Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or ne 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? Required: Required 2 > Financial (disadvantage) per quarter Financial advantage per quarter Required 1 Required 2 Required 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. Totals Dirt Bikes Mountain Bikes Racing Bikes 0 0 0 Contribution margin (105) Traceable fixed expenses 0 0 0 Total traceable foxed expenses Product line segment margin (loss) OO 0 $ 0 $ 0 $ 0 Net operating income (105) 0