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 Bikes Sales .. $300,000 $90,000 $150.000 $60,000 Variable manufacturing and selling expenses.... 120,000 27,000 60.000 33,000 Contribution margin... 180.000 63.000 90.000 27.000 Fixed expenses: Advertising, traceable 30,000 10,000 14.000 6,000 Depreciation of special equipment. 23.000 6.000 9.000 8,000 Salaries of product-line managers. 35.000 12,000 13,000 10,000 Allocated common fixed expenses* 60.000 18,000 30.000 12,000 Total fixed expenses. 148.000 46.000 66.000 36.000 Net operating income (loss) $ 32,000 $ 17,000 $ 24,000 $(9,000) *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 . Should production and sale of the racing bikes be discontinued? Explain. Show computations to support your answer. 2. Recast the above data in a format that would be more usable to management in assessing the long-run profitability of the various product lines