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: 467,000 Dirt Bikes $264,000 117,000 462,000 147,000 194,000 212,000 Mountain Bikes $ 406,000 Racing Bikes $ 259,000 156,000 103,000 69,200 8,200 40,300 20,700 43,200 20,400 7,700 15,100 115,300 40,200 38,800 36,300 185,800 $2,800 81,200 51,800 413,500 121,600 168,000 123,900 $ 48,500 $ 25,400 $44,000 $ (20.900) 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) Total $ 929,000 "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.