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. Mountain Total Dirt Bikes nikes Racing Bikes Sales $932,000 $ 266,000 $ 406,000 $ 260,000 Variable manufacturing and selling expenses 480,000 116,000 209,000 155,000 Contribution margin 452.000 150,000 197,000 105,000 Fixed expenses Advertising, traceable 70,000 8,900 40,500 20,600 Depreciation of special equipment 43,800 20,800 7.500 15,500 Salaries of product-line managers 114,700 40,000 38,700 36,000 Allocated common fixed expenses 186, 400 53,200 81,200 52.000 Total fixed expenses 414,900 122.900 167.900 124,100 Net operating income (loun) $ 37,100 $ 27.109 $ 29,100 $. (19.100) "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