The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 922,000 $ 261,000 $ 401,000 $ 260,000 Variable manufacturing and selling expenses 471,000 116,000 198,000 157,000 Contribution margin 451,000 145,000 203,000 103,000 Fixed expenses: Advertising, traceable 69,700 8,600 40,900 20,200 Depreciation of special equipment 43,200 20,100 7,400 15,700 Salaries of product-line managers 114,200 40,000 38,700 35,500 Allocated common fixed expenses* 184,400 52,200 80,200 52,000 Total fixed expenses 411,500 120,900 167,200 123,400 Net operating income (loss) $ 39,500 $ 24,100 $ 35,800 $ (20,400) *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.