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 $ 917,000 $ 266,000 $ 401,000 $ 250,000 Variable manufacturing and selling expenses 463,000 114,000 194,000 155,000 Contribution margin 454,000 152,000 207,000 95,000 Fixed expenses: Advertising, traceable 69,200 8,100 40,800 20,300 Depreciation of special equipment 43,200 20,400 7,300 15,500 Salaries of product-line managers 115,400 40,900 38,300 36,200 Allocated common fixed expenses* 183,400 53,200 80,200 50,000 Total fixed expenses 411,200 122,600 166,600 122,000 Net operating income (loss) $ 42,800 $ 29,400 $ 40,400 $ (27,000) *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.