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: Racing Bikes Total $ 922,000 468,000 454,000 Dirt Bikes $ 266,000 113,000 153,900 Mountain Bikes $ 403,000 198,000 205,000 $ 253,000 157,000 96,080 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) 69,900 44,500 114,500 184,400 413, 300 8,400 20,800 40, 100 53,200 122,500 $ 30, 500 41,000 7,900 38,900 80,600 168,400 $ 36,600 20,580 15,800 35,500 50,600 122,480 $ (26,400) $ 40.700 *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