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 $ 918,000 $ 265,000 $ 400,000 $ 253,000 Variable manufacturing and selling expenses 473,000 115,000 201,000 157,000 Contribution margin 445,000 150,000 199,000 96,000 Fixed expenses: Advertising, traceable 69,800 8,200 40,900 20,700 Depreciation of special equipment 44,100 20,700 8,000 15,400 Salaries of product-line managers 114,900 40,900 38,800 35,200 Allocated common fixed expenses* 183,600 53,000 80,000 50,600 Total fixed expenses 412,400 122,800 167,700 121,900 Net operating income (loss) $ 32,600 $ 27,200 $ 31,300 $ (25,900) *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