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: Dirt Mountain Racing Total Bike Bikes Bike $927,000 $262.000 $405,000 $260,000 474,000 113,000 209,000 152,000 453,000 149,000 196,000 100.000 Sales Variable manufacturing and selling expenses Contribution margin Tixed expenses Advertising, traceable Depreciation of special equipment Salaries of product line manager Allocated common fixed expende Total fixed expenses Het operating Income (loan) 69,700 8,300 40,400 21,000 44,500 22.000 7,700 15,800 114,100 40,800 38,000 35,300 185,400 52.400 81,000 52.000 Ft 413.700 122.500 167100 124 100 4.32.300 26,500 $ 20,900 $(16.100 "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 financat 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