The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: TotalDirt BikesMountain BikesRacing BikesSales$ $928,000$$ $263,000$$ $407,000$$ $258,000$Variable manufacturing and selling expenses$477,000115,000210,000152,000$Contribution margin$451,000148,000197,000106,000$Fixed expenses: Advertising, traceable$69,8008,40040,80020,600$Depreciation of special equipment$43,80020,1007,90015,800$Salaries of product$-$line managers$115,60040,60038,50036,500$Allocated common fixed expenses$*185,60052,60081,40051,600$Total fixed expenses$414,800121,700168,600124,500$Net operating income $($loss$)$$ $36,200$$ $26,300$$ $28,400$$ $(18,500)*$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.