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: Total $ 924,000 474,000 450,000 Dirt Bikes $ 266,899 112,000 154,000 Mountain Bikes $ 406,000 207.000 199,000 Racing Bikes $ 252,000 155,000 97,000 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) 69,000 43, 409 114,900 184, 800 412, 100 $ 37,900 8,300 20,600 40, 780 53,200 122,800 $ 31,200 40,200 7,700 38, 10e 81,200 167, 2ee $ 31,800 20,500 15, 100 36,100 50, 400 122, 100 $ (25,100) "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