Extracted text: 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: Mountain Total $ 926,000 468,000 458,000 Dirt Bikes $ 264,000 117,000 147,000 Racing Bikes $ 259,000 158,000 101,000 Bikes $ 403,000 193,000 210,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses 70,300 44,800 114,600 185,200 414,900 $ 43,100 8,800 21,000 40,300 52,800 122,900 40,700 8,000 38,600 8০,600 167,900 $ 42,100 20,800 15,800 35,700 51,800 124,100 Net operating income (loss) $ 24,100 $ (23,100) "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 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.