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 $ 261,000 119,000 Mountain Bikes $ 402,000 Racing Bikes 191,000 $ 256,000 154,000 455,000 142,000 211,000 102,000 69,500 8,500. 40,400 20,600 43,800 20,900 7,700 15,2001 115,600 40,800 38,800 36,000 183,800 52,200 80,400 51,200 412,700 122,400 167,300 123,000 $ 42,300 $ 19,600 $ 43,700 $ (21,000) 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 $ 919,000 464,000 Net operating income (loss) '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. "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