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 $ 269,000 $ 402,000 $ 255,000 Variable manufacturing and selling expenses 471,000 115,000 201,000 155,000 Contribution margin 455,000 154,000 201,000 100,000 Fixed expenses: Advertising, traceable 68,800 8,300 40,300 20,200 Depreciation of special equipment 43,700 20,200 7,800 15,700 Salaries of product-line managers 115,000 40,600 38,900 35,500 Allocated common fixed expenses* 185,200 53,800 80,400 51,000 Total fixed expenses 412,700 122,900 167,400 122,400 Net operating income (loss) $ 42,300 $ 31,100 $ 33,600 $ (22,400) *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.