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 $ 926,000 479,000 447,000 Dirt Bikes $ 262,000 119,000 143,000 Mountain Bikes $ 409,000 208,000 201,000 Racing Bikes $ 255,000 152,000 103,000 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) 69,700 44,100 114,800 185,200 413,800 $ 33,200 8,900 20,600 40,500 52,400 122,400 $ 20,600 40,400 7,900 38,200 81,800 168,300 $ 32,700 20,400 15,600 36,100 51,000 123, 100 $ (20,100) *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