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 Mountain Total Dirt Bikes Bikes Racing Bikes Sales $ 921,000 $ 270,000 $ 400,000 $ 251,000 Variable manufacturing and selling expenses 474,000 111,000 205,000 158,000 Contribution margin 447,000 159,000 195.000 93,000 Fixed expenses Advertising, traceable 69,000 8,400 40,300 20,300 Depreciation of special equipment 43,100 20,200 7,600 15,300 salaries of product-line managers 113,800 40,100 38,400 35,300 Allocated common fixed expenses 184,200 54,000 80,000 50,200 Total fixed expenses 410.100 122,700 166,300 121,100 Net operating income (lons) $ 36,900 $ 36,300 $ 28,700 $ (28,100) "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