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 Mountain Racing Bikes Total Bikes Bikes Sales Variable manufacturing and selling expenses Contribution margin 453,000 148,000 206,00-99,000 Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 69, 800 20, 600 15, 200 35, 600 51,200 ,500 43, 900 20,800 40, 700 7,900 38, 800 185,8 52, 6 Total fixed expenses Net operating income (loss) $ 38, 900 $ 25,900$ 36, 600 $(23, 600) 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