Exercise 13-2 (Algo) Dropping or Retaining a Segment (L013-2) The Regal Cycle Company manufactures three types of bicycles--a cirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow Dirt Mountain Racing Total Bikes Bikes Bikes $931.000 $267,000 $409,00 $ 255,000 466,00 120,000 193,00 153,000 465.000 147.000 102.000 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 Net operating incon (loss) 70,100 8,800 40,700 20,600 43.000 20,400 7,200 15,400 114,500 40,400 38,500 35,800 185,200 53.400 125,000 168,200 122,600 $ 51,200 $ 24,000 $47.000 $(20,600) "Allocated on the basis of sales dollars. Management is concemed 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? 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 Required 2 Required What is the financial advantage (disadvantage) per quarter of discontinuing the facing bikes? Required)