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 $ 928,000 $ 270,000 $ 404,000 $ 254,000 Variable manufacturing and selling expenses 469,000 116,000 195,000 158,000 Contribution margin 459,000 154,000 209,000 96,000 Fixed expenses: Advertising, traceable 68,900 8,100 40,600 20,200 Depreciation of special equipment 43,600 20,200 7,700 15,700 Salaries of product-line managers 114,200 40,300 38,700 35,200 Allocated common fixed expenses* 185,600 54,000 80,800 50,800 Total fixed expenses 412,300 122,600 167,800 121,900 Net operating income (loss) $ 46,700 $ 31,400 $ 41,200 $ (25,900) *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.