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: Total Book Sales Variable manufacturing and selling expenses Contribution margin $ 923,000 459,000 Dirt Bikes $ 262,000 110,000 464,000 152,000 Mountain Bikes $ 403,000 195,000 208,000 Racing Bikes $ 258,000 154,000 104,000 Fixed expenses: Bint Advertising, traceable 70,500 8,800 41,000 20,700 Depreciation of special equipment 43,100 20,100 7,100 15,900 ink erences Total fixed expenses Net operating income (loss) Salaries of product-line managers 114,700 40,900 38,300 35,500 Allocated common fixed expenses. 184,600 52,400 80,600 51,600 412,900 122,200 167,000 123,700 $51,100 $ 29,800 $ 41,000 $ (19,700) "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.