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) Total $ 927,000 467,000 Mountain. Dirt Bikes Bikes $264,000 $ 404,000 113,000 201,000 Racing Bikes $ 259,000 153,000 460,000 151,000 203,000 106,000 69,200 8,500 40,600 20,100 43,800 20,700 7,700 15,400 115,100 40,800 38,200 36,100 185,400 52,800 80,800 51,800 413,500 122,800 167,300 123,400 $ 46,500 $ 28,200 $ 35,700 $ (17,400) "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.