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: total dirt bikes mountain bikes racing bikes sales $ 922,000 $ 263,000 $ 403,000 $ 256,000 variable manufacturing and selling expenses 468,000 113,000 200,000 155,000 contribution margin 454,000 150,000 203,000 101,000 fixed expenses: advertising, traceable 70,100 8,700 40,800 20,600 depreciation of special equipment 42,600 20,400 7,100 15,100 salaries of product-line managers 115,000 40,400 38,300 36,300 allocated common fixed expenses* 184,400 52,600 80,600 51,200 total fixed expenses 412,100 122,100 166,800 123,200 net operating income (loss) $ 41,900 $ 27,900 $ 36,200 $ (22,200) *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.