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 $ 931,000 467,000 464,000 Dirt Bikes $ 262,000 118,000 144,000 Mountain Bikes $ 409,000 190,000 219,000 Racing Bikes $ 260,000 159,000 101,000 69,400 8,700 40,500 20,200 44,200 20,800 7,400 16,000 115,200 40,100 38,300 36,800 186,200 52,400 81,800 52,000 415,000 122,000 168,000 125,000 $ 49,000 $ 22,000 $ 51,000 $ (24,000) 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. Complete this question by entering your answers in the tabs below.