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 $ 921,000 $ 264,000 $ 407,000 $ 250,000 Variable manufacturing and selling expenses 462,000 112,000 192,000 158,000 Contribution margin 459,000 152,000 215,000 92,000 Fixed expenses: Advertising, traceable 70,500 9,000 40,500 21,000 Depreciation of special equipment 43,600 20,700 7,400 15,500 Salaries of product-line managers 113,800 40,400 38,000 35,400 Allocated common fixed expenses* 184,200 52,800 81,400 50,000 Total fixed expenses 412,100 122,900 167,300 121,900 Net operating income (loss) $ 46,900 $ 29,100 $ 47,700 $ (29,900) *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.