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: Total $ 921,000 468,000 453,000 Dirt Bikes $ 268,000 118,000 150,000 Mountain Bikes $ 403,000 198,000 205,000 Racing Bikes $ 250,000 152,000 98,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) 69, 700 44,300 114,900 184,200 413, 100 $ 39,900 8,400 20,600 40,300 53,600 122,900 $ 27, 100 40,800 7,900 38,500 80,600 167,800 $ 37,200 20,500 15,800 36,100 50,000 122,400 $ (24,400) *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