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: Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses" Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Total $ 914,000 471,000 Dirt Bikes $ 263,000 Mountain Bikes $400,000 Racing Bikes $ 251,000 113,000 207,000 151,000 443,000 150,000 193,000 100,000 69,600 8,600 40,700 20,300 43,300 20,300 7,600 15,400 114,500 40,600 38,400 35,500 182,800 52,600 80,000 50,200 410,200 122,100 166,700 121,400 $ 32,800 $ 27,900 $ 26,300 $ (21,400) 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