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 $ 264,000 $ 409,000 $ 255,000 Variable manufacturing and selling expenses 458,000 111,000 196,000 151,000 Contribution margin 470,000 153,000 213,000 104,000 Fixed expenses: Advertising, traceable 69,300 8,400 40,600 20,300 Depreciation of special equipment 43,900 20,600 7,800 15,500 Salaries of product-line managers 115,100 40,000 38,300 36,800 Allocated common fixed expenses* 185,600 52,800 81,800 51,000 Total fixed expenses 413,900 121,800 168,500 123,600 Net operating income (loss) $ 56,100 $ 31,200 $ 44,500 $ (19,600) *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