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: Dirt Mountain Racing Total Bikes Bikes Bikes Sales Variable manufacturing and selling $ 932,000 $267,000 407,000 258,000 151,000 459,000 111,000 197,000 expenses Contribution margin Fixed expenses: 473,000 156,000 210,000 107,000 20,800 15,600 35,000 51,600 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 69,900 8,900 20,900 40,200 44,300 114,000 7,800 38,900 40,100 186,400 53,400 81,400 Total fixed expenses 414,600 123,300 168,300 123,000 32,700 $ 41,700 $ (16,000) Net operating income (loss) $ 58,400 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