Racing Bikes $929,000 $266,000 $409,000 254,000 Dirt Mountain Bikes Total Bikes Sales Variable manufacturing and selling 467,000 116,000 197,000 154,000 expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses 462,000 150,000 212,000 100,000 70,200 44,000 115,900 185, 800 20,800 15,400 36,700 50,800 123,700 $ 46,100 $ 26,400 $43,400 $ (23,700) 8,800 40,600 7,600 38,600 81,800 168,600 21,000 40,600 53,200 123,600 415,900 Net operating income (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 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. 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 Sales Variable manufacturing and selling expenses Contribution margin (loss) 0 0 Traceable fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of the product line managers Total traceable fixed expenses 0 0 0 Product line seament marain (loss) ol $