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 $ 917,000 $ 263,000 $ 403,000 $ 251,000 Variable manufacturing and selling expenses 478,000 119,000 209,000 150,000 Contribution margin 439,000 144,000 194,000 101,000 Fixed expenses: Advertising, traceable 68,900 8,100 40,500 20,300 Depreciation of special equipment 44,100 20,900 7,800 15,400 Salaries of product-line managers 115,100 40,400 38,900 35,800 Allocated common fixed expenses* 183,400 52,600 80,600 50,200 Total fixed expenses 411,500 122,000 167,800 121,700 Net operating income (loss) $ 27,500 $ 22,000 $ 26,200 $ (20,700) *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.