Check my work Check My Work button is now enabled1Item 1 Item 1 5 points The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 925,000 $ 265,000 $ 410,000 $ 250,000 Variable manufacturing and selling expenses 472,000 116,000 198,000 158,000 Contribution margin 453,000 149,000 212,000 92,000 Fixed expenses: Advertising, traceable 69,400 8,700 40,500 20,200 Depreciation of special equipment 43,600 20,600 7,500 15,500 Salaries of product-line managers 115,400 40,100 38,900 36,400 Allocated common fixed expenses* 185,000 53,000 82,000 50,000 Total fixed expenses 413,400 122,400 168,900 122,100 Net operating income (loss) $ 39,600 $ 26,600 $ 43,100 $ (30,100) *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.