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: 2.33 points Dirt Mountain Racing Total Bikes Bikes Bikes $ 923,000 $265,000 $ 405,000 $ 253,000 460,000 115,000 191,000 154,000 463,000 150,000 214,000 eBook 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) Hint 68,700 8,200 40,200 20,300 42,800 20, 2007 , 200 15,400 115,900 40,800 38,300 36,800 184,600 53,000 81,000 50,600 412,000 122,200 166,700 123, 100 $ 51,000 $ 27,800 $ 47,300 $(24,100) Print References *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