The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes $ 919,00 $ 261,200 $ 402,00 $ 256,200 487,000 119,080 208,200 160,000 432,000 142,900 194,000 96,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses Net operating income (loss) 70,00 44,600 115,900 183,800 414,300 17,700 9, 21,200 40,400 52,200 122,600 $ 19,400 $ 40, See 7,700 38,500 80,400 167,100 26,900 20,5ee 15,900 37,00 51,200 124,600 $(28,600) $ *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