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: Dirt Mountain Racing Total Bikes Bikes Bikes Sales 5 925,000 $265,00 $ 48,000 5 252,000 Variable manufacturing and selling expenses 472,800 113,000 285,eee 154,000 Contribution margin 453,000 152, eee 203, eee 98,eee Fixed expenses: Advertising, traceable 69,400 8,600 40,600 20,200 Depreciation of special equipment 43,900 20,700 7,400 15,860 Salaries of product line managers 113,500 40,100 38,200 35,200 Allocated common fixed expenses 185,000 53,000 81,600 50,400 Total fixed expenses 411,800 122,400 167,800 121,600 Net operating income (105) $ 41,200 $ 29,600 $ 35,200 $(23,600) "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