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 $ 924,000 $269,000 $ 401,000 $ 254,000 484,000 115,000 210,000 159,000 440,000 154,000 191,000 95,000 Sales Variable nanufacturing and selling expense 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 (10) 69,900 8.400 40,900 20,600 44,000 20,900 7,900 15,200 114,600 40,400 38,600 35,600 184,800 53,800 80,200 50.800 413,300 123,500 167,600 122,200 $ 26,700$ 30,500 $ 23, 400 ${27, 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