The Regal Cycle Company manufactures three types of bicycles—adirt bike, a mountain bike, and a racing bike. Data on sales andexpenses for the past quarter follow: Total Dirt Bikes MountainBikes Racing Bikes Sales $ 927,000 $ 269,000 $ 406,000 $ 252,000Variable manufacturing and selling expenses 473,000 117,000 204,000152,000 Contribution margin 454,000 152,000 202,000 100,000 Fixedexpenses: Advertising, traceable 69,600 8,200 40,500 20,900Depreciation of special equipment 44,000 20,500 7,500 16,000Salaries of product-line managers 113,900 40,100 38,700 35,100Allocated common fixed expenses* 185,400 53,800 81,200 50,400 Totalfixed expenses 412,900 122,600 167,900 122,400 Net operating income(loss) $ 41,100 $ 29,400 $ 34,100 $ (22,400) *Allocated on thebasis of sales dollars. Management is concerned about the continuedlosses shown by the racing bikes and wants a recommendation as towhether or not the line should be discontinued. The specialequipment used to produce racing bikes has no resale value and doesnot 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 wouldbe more useful to management in assessing the long-runprofitability of the various product lines.