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 $ 933,000 $ 269,000 $ 404,000 $ 260,000 Variable manufacturing and selling expenses 469,000 118,000 197,000 154,000 Contribution margin 464,000 151,000 207,000 106,000 Fixed expenses: Advertising, traceable 70,100 8,600 40,500 21,000 Depreciation of special equipment 44,100 20,500 7,700 15,900 Salaries of product-line managers 115,700 40,200 38,800 36,700 Allocated common fixed expenses* 186,600 53,800 80,800 52,000 Total fixed expenses 416,500 123,100 167,800 125,600 Net operating income (loss) $ 47,500 $ 27,900 $ 39,200 $ (19,600) *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.