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 $ 915,000 $ 263,000 $ 401,000 $ 251,000 Variable manufacturing and selling expenses 474,000 116,000 204,000 154,000 Contribution margin 441,000 147,000 197,000 97,000 Fixed expenses: Advertising, traceable 69,900 8,300 40,900 20,700 Depreciation of special equipment 43,600 20,900 7,600 15,100 Salaries of product-line managers 115,000 40,800 38,300 35,900 Allocated common fixed expenses* 183,000 52,600 80,200 50,200 Total fixed expenses 411,500 122,600 167,000 121,900 Net operating income (loss) $ 29,500 $ 24,400 $ 30,000 $ (24,900) *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.