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 $920,000 $267,000 400,000 253,000 Total Bikes Bikes Sales Variable manufacturing and selling 458,000 112,000 193,000 153,000 expenseS Contribution margin Fixed expenses: 462,000 155,000 207,000 100,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 40,900 7,200 38,900 80,000 411,800 122,900 167,000 8,900 42,900 20,500 114,400 40,100 53,400 70,500 20,700 15,200 35,400 50,600 121,900 184,000 Total fixed expenses Net operating income (loss) $ 50,200 32,100 40,000 $(21,900) 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