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 Bikes Racing Bikes Sales $ 934,000 $ 265,000 $ 410,000 $. 259,000 Variable manufacturing and selling expenses 474,000 117,000 203,000 154,000 Contribution margin 460,000 148,000 207.000 105,000 Fixed expenses: Advertising, traceable 69,600 8,500 40,400 20,700 Depreciation of special equipment 43,900 20,500 7,400 16,000 Salaries of product-line managers 114,300 40,400 38,700 35,200 Allocated common fixed expenses 186,800 53,000 82,000 51,800 Total fixed expenses 414,600 122.400 168,500 123.700 Net operating Income (105) $ 45,400 $ 25,600 $ 38,500 $ 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