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: Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expense3* Total fixed expenses Net operating income (1033) Dirt Mountain Racing Total Bikes Bikes Bikes $928,000 $267,000 $405,000 $256,000 475,000 110,000 208,000 157,000 453,000 157,000 197,000 99,000 69,800 8,700 40, 800 20,300 43,000 20,600 7,100 15,300 113,700 40,000 38, 400 35, 300 185, 600 53, 400 81,000 51,200 412,100 122,700 167, 300 122, 100 $ 40,900 $ 34,300 $ 29,700 $ (23, 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