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 $ 931,000 $ 267,000 $ 409,000 $ 255,000 Variable manufacturing and selling expenses 468,000 115,000 194,000 159,000 Contribution margin 463,000 152,000 215,000 96,000 Fixed expenses: Advertising, traceable 69,000 8,200 40,300 20,500 Depreciation of special equipment 43,000 20,100 7,200 15,700 Salaries of product-line managers 115,500 40,100 38,500 36,900 Allocated common fixed expenses* 186,200 53,400 81,800 51,000 Total fixed expenses 413,700 121,800 167,800 124,100 Net operating income (loss) $ 49,300 $ 30,200 $ 47,200 $ (28,100) *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.