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 $ 925,000 $ 270,000 $ 403,000 $ 252,000 Variable manufacturing and selling expenses 463,000 118,000 190,000 155,000 Contribution margin 462,000 152,000 213,000 97,000 Fixed expenses: Advertising, traceable 69,600 8,400 40,600 20,600 Depreciation of special equipment 43,500 20,700 7,100 15,700 Salaries of product-line managers 115,500 40,700 38,200 36,600 Allocated common fixed expenses* 185,000 54,000 80,600 50,400 Total fixed expenses 413,600 123,800 166,500 123,300 Net operating income (loss) $ 48,400 $ 28,200 $ 46,500 $ (26,300) *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.