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 $ 922,000 $ 264,000 $ 406,000 $ 252,000 Variable manufacturing and selling expenses 462,000 111,000 200,000 151,000 Contribution margin 460,000 153,000 206,000 101,000 Fixed expenses: Advertising, traceable 69,600 8,500 40,900 20,200 Depreciation of special equipment 43,200 20,800 7,300 15,100 Salaries of product-line managers 116,000 40,800 38,900 36,300 Allocated common fixed expenses* 184,400 52,800 81,200 50,400 Total fixed expenses 413,200 122,900 168,300 122,000 Net operating income (loss) $ 46,800 $ 30,100 $ 37,700 $ (21,000) *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.