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 $ 924,000 Dirt Bikes $267,000 Mountain Bikes $ 406,000 Racing Bikes $ 251,000 477,000 447,000 112,000 155,000 206,000 159,000 200,000 92,000 69,200 8,300 40,400 20,500 42,900 20,200 7,300 15,400 114,200 40,300 38,600 35,300 184,800 53,400 81,200 50,200 411,100 122,200 167,500 121,400 $ 35,900 $ 32,800 $ 32,500 $ (29,400) 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.