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 $922,000 $261,000 410,000 251,000 154,000 466,000 113,000 199,000 expenses Contribution margin Fixed expenses 456, 000 148,000 211,000 97,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 40,300 7,300 38,500 82,000 411,200 122,100 168,100 8,900 20,500 114,200 40,500 52,200 69,600 43,000 20,400 15,200 35,200 50,200 121,000 42,900 (24,000) 184,400 Total fixed expenses Net operating income (loss) 44,800 $ 25,900 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