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: Total Dirt Bikes Mountain Bikes Racing Bikes $ $ $ Sales 918,000 02 22 265,000 402,000 251,000 Variable manufacturing and selling expenses 476,000 114,000 205,000 157,000 Contribution margin 442,000 151,000 197,000 94,000 Fixed expenses: k Advertising, traceable 69,800 Depreciation of special 44,000 8,900 40,500 20,400 20,700 7,600 15,700 equipment Salaries of product-line 115,500 40,400 38,400 36,700 managers Allocated common fixed 183,600 expenses* Total fixed expenses 412,900 53,000 80,400 123,000 166,900 50,200 123,000 $ Net operating income (loss) $ 29,100 $28,000 $ 30,100 (29,000) Ce "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