Dirt Bikes Mountain Racing Bikes Total Bikes Sales $916,000 $262,000 $403,000 $251,000 Variable manufacturing and selling 471,000 110,000 210,000 151,000 expenses 100.000 Contribution margin Fixed expenses: 445,000 152,000 193,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses 70,000 43,900 20,600 115,700 183,200 40,700 7,500 38,500 80,600 8,700 20,600 15,800 36,400 50,200 40,800 52,400 123,000 412,800 122,500 167,300 $ 32,200 29,500$ 25,700 $ (23, 000) Net operating income (loss) 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