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 $ 915,000 $ 263,000 $ 401,000 $ 251,000 Variable manufacturing and selling expenses 476,000 114,000 206,000 156,000 Contribution margin 439,000 149,000 195,000 95,000 Fixed expenses: Advertising, traceable 70,000 8,400 41,000 20,600 Depreciation of special equipment 42,900 20,400 7,300 15,200 Salaries of product-line managers 116,100 40,700 39,000 36,400 Allocated common fixed expenses* 183,000 52,600 80,200 50,200 Total fixed expenses 412,000 122,100 167,500 122,400 Net operating income (loss) $ 27,000 $ 26,900 $ 27,500 $ (27,400) *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.