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 Dirt Bikes $ 919,000 $ 262,000 Mountain Bikes $ 401,000 Racing Bikes 475,000 116,000 202,000 $ 256,000 157,000 444,000 146,000 199,000 99,000 69,800 8,700 40,400 20,700 42,900 20,300 7,400 15,200 114,500. 40,200 38,600 35,700 183,800 52,400 80,200 51,200 411,000 121,600 166,600 122,800 $ 33,000 $ 24,400 $ 32,400 $ (23,800) 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.