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 flountain Racing Total Bikes Bikes Bikes $ 927,000 $268,000 $405,000 $ 254,000 482,000 114,000 210,000 158,000 445,000 154,000 195,000 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) 69,600 8,400 40,800 20,400 43,500 20,800 7,500 15, 200 113,900 40,600 38,300 35,000 185,400 53,600 81,000 50, 800 412,400 123,400 167,600 121,400 $ 32,600 $ 30,600 $ 27,400 $(25,400) *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