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 Bike Bikes Bikes sales $936,000 $268,000 5410,000 $ 258,000 variable manufacturing and selling expenses 486.000 119,000 207.000 160,000 Contribution margin 40.000 100.000 200,000 Fixed expenses Advertising, traceable 69,900 8,200 40,700 21,000 Depreciation of special equipment 43,900 20,800 salaries of product-line managers 7,600 15,500 114,700 40,400 38,300 36,000 Allocated common fixed expenses 167,200 53.600 $2.000 51.600 Total fixed expenses 415700 125,000 160600 120100 Net operating income (los) $ 34,300 $ 26,000 $34,400 5(26,100) "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