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. Dire Bikes Bikes $ 921, 000 s265,0 s 404,000 S 252,000 Hountain Racing Bikes Total sales variable manufacturing and selling expenses 447,000 150,e0 16,0 contribution nargin Fixed expenses: Advertising, traceable Depreciation of special equipnent salaries of product-1ine managers Allocated comnon fixed expenses Total fixed exxpenses 101,000 8,900 44,00e 20,see 114,300 40,100 184, 200 53,800 412,Gee 1 00 40,400 7,500 38,100 se, see 166,s00 122,600 24,400 $ 26,100 S 29,200 $(21,600) 20,00 16,00e 35,400 50,400 70,100 Net operating 1ncone (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 discotinued? 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 Reguired 3 What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes? Required 1 Required 2 Required 3 Should the production and sale of racing bikes be discontinued? Yes No 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 Contribution margin doss) Traceable ficed expenses Total traceable fxed expenses Product line segment margin (loss) Net operating income (loss)