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: Dirt Mountain Racing Bikes Total Bikes Bikes Sales Variable manufacturing and selling expenses476,000 119,000 Contribution margin Fixed expenses: 917,000 $262,000 $ 402,000 253,080 198,000 159,000 204,00094,0e 441,000 143,000 A00036 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 40,300 7,200 38,800 80,400 68,900 43,200 20, 300e 8,300 20,300 15,700 36,300 50.600 115, 500 40,400 183.400 52,400 Total fixed expenses Net operating income (loss) 411,000121,400 166,700 122,9e $ 30,000 21,600 37,300 (28,900) 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