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 Bikes Mountain Racing Bikes Total Bikes Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: $ 933,000 $269,000 404,000 $ 260,000 465,000 118,000 191,000 156,000 213,000 104,000 468,000 151,900 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 68,900 43,900 20,200 15,500 36,900 52,800 124,600 $ 53,000 $ 28,000 $45,600 $(20,600) 8,300 20,800 115,600 40,100 186,60053,80e 415,000 123,000 40,400 7,600 38,600 80,800 167,480 Total fixed expenses 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