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 $ 928,000 $ 269,000 $ 408,000 $ 251,000 Variable manufacturing and selling expenses 469,000 115,000 204,000 150,000 Contribution margin 459,000 154,000 204,000 101,000 Fixed expenses: Advertising, traceable 69,600 8,700 40,100 20,800 Depreciation of special equipment 44,100 20,700 7,600 15,800 Salaries of product-line managers 116,000 41,000 38,200 36,800 Allocated common fixed expenses* 185,600 53,800 81,600 50,200 Total fixed expenses 415,300 124,200 167,500 123,600 Net operating income (loss) $ 43,700 $ 29,800 $ 36,500 $ (22,600) *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.