A 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	$ 923,000	$ 267,000	$ 405,000	$ 251,000
Variable manufacturing and selling expenses	463,000	115,000	193,000	155,000
Contribution margin	460,000	152,000	212,000	96,000
Fixed expenses:
Advertising, traceable	69,000	8,700	40,100	20,200
Depreciation of special equipment	44,200	20,500	7,800	15,900
Salaries of product-line managers	116,300	40,800	38,600	36,900
Allocated common fixed expenses*	184,600	53,400	81,000	50,200
Total fixed expenses	414,100	123,400	167,500	123,200
Net operating income (loss)	$ 45,900	$ 28,600	$ 44,500	$ (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.