expenses for the past quarter follow:

	Total			Dirt Bikes			Mountain Bikes			Racing Bikes
Sales	$	924,000		$	265,000		$	403,000		$	256,000
Variable manufacturing and selling expenses		473,000			114,000			203,000			156,000
Contribution margin		451,000			151,000			200,000			100,000
Fixed expenses:
Advertising, traceable		69,200			8,500			40,300			20,400
Depreciation of special equipment		43,300			20,500			7,400			15,400
Salaries of product-line managers		115,200			40,500			38,200			36,500
Allocated common fixed expenses*		184,800			53,000			80,600			51,200
Total fixed expenses		412,500			122,500			166,500			123,500
Net operating income (loss)	$	38,500		$	28,500		$	33,500		$	(23,500)

*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.