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The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike

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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 $925,000 $267,000 $404,000 $ 254,000 Variable manufacturing and selling expenses 462,000 113,000 191,000 158,000 Contribution margin 463,000 154,000 213,000 96,000 Fixed expenses: Advertising, traceable 68,700 8,200 40,200 20,300 Depreciation of special equipment 43,400 20,800 7,300 15,300 Salaries of product-line managers 116,400 40,800 38,800 36,800 Allocated common fixed expenses* 185,000 53,400 80,800 50,800 Total fixed expenses 413,500 123,200 167,100 123,200 Net operating income (loss) $ 49,500 $ 30,800 $ 45,900 $(27,200) 
*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.