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 $ 929,000 454,000 475,000 Dirt Bikes $ 269,000 114,000 155,000 Mountain Bikes $ 405,000 190,000 215,000 Racing Bikes $ 255,000 150,000 105,000 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) 69,900 43,600 116,300 185,800 415,600 $ 59,400 9,000 20,700 40,500 53,800 124,000 $ 31,000 40,200 7,800 38,900 81,000 167,900 $ 47,100 20,700 15,100 36,900 51,000 123,700 $ (18,700) *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