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: Total $ 934,000 461,000 473,000 Mountain Dirt Bikes Bikes $ 269,000 $ 410,000 118,000 192,000 151,000 218,000 Racing Bikes $ 255,000 151,000 104,000 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) 70,300 43,300 115,300 186,800 415,700 $ 57,300 8,400 20,200 40,600 53,800 123,000 $ 28,000 40,900 7,900 38,700 82,000 169,500 $ 48,500 21,000 15,200 36,000 51,000 123,200 $ (19,200) *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