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 $ 927,000 463,000 464,000 Dirt Bikes $ 265,000 112,000 153,000 Mountain Bikes $ 406,000 192,000 214,000 Racing Bikes $ 256,000 159,000 97,000 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) 69,100 43,500 115,100 185,400 413, 100 $ 50,900 8,700 20,700 40,900 53,000 123,300 $ 29,700 40,200 7,200 38,500 81,200 167,100 $ 46,900 20,200 15,600 35,700 51,200 122,700 $ (25,700) *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