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 $ 924,000 $ 270,000 $ 401,000 $ 253,000 Variable manufacturing and selling expenses 475,000 113,000 202,000 160,000 Contribution margin 449,000 157,000 199,000 93,000 Fixed expenses: Advertising, traceable 69,600 8,300 40,800 20,500 Depreciation of special equipment 44,000 21,000 7,900 15,100 Salaries of product-line managers 114,500 40,100 38,100 36,300 Allocated common fixed expenses* 184,800 54,000 80,200 50,600 Total fixed expenses 412,900 123,400 167,000 122,500 Net operating income (loss) $ 36,100 $ 33,600 $ 32,000 $ (29,500) *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.