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: Dirt Total $ Bikes Mountain Bikes Racing Bikes $ $ Sales $ 920,000 262,000 403,000 255,000 Variable manufacturing and selling expenses Contribution margin 453,000 467,000 117,000 145,000 193,000 157,000 210,000 98,000 Fixed expenses: Advertising, traceable 70,000 8,300 41,000 20,700 Depreciation of 43,000 20,500 7,300 special equipment 15,200 Salaries of product- line managers 114,600 40,400 38,800 35,400 Allocated common fixed 184,000 52,400 80,600 expenses* 51,000 Total fixed expenses 411,600 121,600 167,700 122,300 Net operating income (loss) $ $ $ $ 42,300 41,400 23,400 (24,300) *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.