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 $931,000 $264, 000 $ 407,000 $ 260,000 475,000 118,000 206,000 151,000 456,000 140,000 201,000 109,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expensest Advertising, traceable Depreciation of special equipment Salaries of product line managers Allocated connon fixed expenses Total fixed expenses Net operating incone (loss) 69,800 8,600 40,200 21,000 43, 400 20,600 7,500 15,300 115,000 40,500 38,600 35,900 106.200 52,00 81,400 52,000 414, 400 122,50 167,700 124,200 $ 41,600 $ 23,600 $ 33,300 5(15,200) "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