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 $ 934,000 $ 267,000 $ 409,000 $ 258,000 Variable manufacturing and selling expenses 466,000 114,000 200,000 152,000 Contribution margin 468,000 153,000 209,000 106,000 Fixed expenses: Advertising, traceable 69,300 8,400 40,200 20,700 Depreciation of special equipment 43,700 20,700 7,600 15,400 Salaries of product-line managers 114,400 40,200 38,400 35,800 Allocated common fixed expenses* 186,800 53,400 81,800 51,600 Total fixed expenses 414,200 122,700 168,000 123,500 Net operating income (loss) $ 53,800 $ 30,300 $ 41,000 $ (17,500) *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.