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 $ 930,000 461,000 469,000 Dirt Bikes $ 263,000 111,000 152,000 69,600 43,100 115,300 186,000 414,000 $ 55,000 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. 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. 8,500 20,300 40,200 52,600 Mountain Bikes $ 409,000 198,000 211,000 121,600 $ 30,400 Racing Bikes $ 258,000 152,000 106,000 40,800 7,400 20,300 15,400 37,000 51,600 124,300 $ 42,900 $ (18,300) 38,100 81,800 168, 100 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.