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 $ 917,000 $ 263,000 $ 401,000 $ 253,000 Variable manufacturing and selling expenses 469,000 115,000 197,000 157,000 Contribution margin 448,000 148,000 204,000 96,000 Fixed expenses: Advertising, traceable 69,700 8,900 40,200 20,600 Depreciation of special equipment 43,500 20,600 7,500 15,400 Salaries of product-line managers 116,600 40,800 39,000 36,800 Allocated common fixed expenses* 183,400 52,600 80,200 50,600 Total fixed expenses 413,200 122,900 166,900 123,400 Net operating income (loss) $ 34,800 $ 25,100 $ 37,100 $ (27,400) *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.