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 $922,000 $262,000 $403,000 $ 257,000 476,000 116,000 283,000 157,000 446,000 146,000 200,000 100,000 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 toss) 69,400 8,208 40,500 20,700 43,500 20,600 7,700 15,200 114,500 40,800 38,100 35,600 184,400 52,400 B0,600 51,400 411,800 122,000 166,900 122,900 $ 34,200 $ 24,000 $ 33,100 $(22,900) "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