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 $ 922,000 456,000 466,000 Dirt Bikes $ 268,000 111,000 157,000 Mountain Bikes $ 403,000 194,000 209,000 Racing Bikes $ 251,000 151,000 100,000 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 Net operating income (loss) 70,600 44,400 114,300 184,400 413,700 $ 52,300 8,800 20,800 40,800 53,600 124,000 $ 33,000 40,900 7,800 38,100 80,600 167,400 $ 41,600 20,900 15,800 35,400 50,200 122,300 $ (22,300) *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