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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 932,000 $ 269,000 $ 407,000 $ 256,000 Variable manufacturing and selling expenses 477,000 119,000 204,000 154,000 Contribution margin 455,000 150,000 203,000 102,000 Fixed expenses: Advertising, traceable 69,500 8,800 40,400 20,300 Depreciation of special equipment 43,300 20,200 7,400 15,700 Salaries of product-line managers 113,800 40,300 38,100 35,400 Allocated common fixed expenses* 186,400 53,800 81,400 51,200 Total fixed expenses 413,000 123,100 167,300 122,600 Net operating income (loss) $ 42,000 $ 26,900 $ 35,700 $ (20,600) *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.