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 $ 408,000 $ 250,000 Variable manufacturing and selling expenses 472,000 112,000 204,000 156,000 Contribution margin 450,000 152,000 204,000 94,000 Fixed expenses: Advertising, traceable 69,500 9,000 40,200 20,300 Depreciation of special equipment 43,100 20,200 7,800 15,100 Salaries of product-line managers 114,400 40,700 38,700 35,000 Allocated common fixed expenses* 184,400 52,800 81,600 50,000 Total fixed expenses 411,400 122,700 168,300 120,400 Net operating income (loss) $ 38,600 $ 29,300 $ 35,700 $ (26,400) *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.