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 $ 928,000 468,000 460,000 Dirt Bikes $ 268,000 116,000 152,000 Mountain Bikes $ 403,000 196,000 207,000 Racing Bikes $ 257,000 156,000 101,000 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) 70,000 43,800 115,400 185,600 414,800 $ 45,200 8,400 20,800 40, 100 53,600 122,900 $ 29, 100 40,700 7,800 38,700 80,600 167,800 $ 39,200 20,900 15,200 36,600 51,400 124, 100 $ (23, 100) *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