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 $ 926,000 $ 265,000 $ 405,000 $ 256,000 Variable manufacturing and selling expenses 454,000 110,000 193,000 151,000 Contribution margin 472,000 155,000 212,000 105,000 Fixed expenses: Advertising, traceable 69,900 8,900 40,600 20,400 Depreciation of special equipment 43,100 20,400 7,300 15,400 Salaries of product-line managers 115,400 40,200 38,400 36,800 Allocated common fixed expenses* 185,200 53,000 81,000 51,200 Total fixed expenses 413,600 122,500 167,300 123,800 Net operating income (loss) $ 58,400 $ 32,500 $ 44,700 $ (18,800) *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.