I ONLY NEED QUESTION #1

Saved Help Save & Exit Submit Check my work 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: Dirt Mountain Racing Total Bikes Bikes $ 919,000 $264,000 $ 401,000 $ 254,000 458,000 114,000 192,000 152,000 461,000 150,000 209,000 102,000 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 income (loss) 70,000 8,900 40,700 20,400 44.200 21.000 7.600 15.600 116,000 40,800 38,600 36,600 183, 800 52,800 80,200 50.800 414,000 123,500 167, 100 123,400 $ 17,000 $ 26,500 $ 41,900 $(21,400) "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