expenses for the past quarter follow:

	Total			Dirt Bikes			Mountain Bikes			Racing Bikes
Sales	$	935,000		$	269,000		$	409,000		$	257,000
Variable manufacturing and selling expenses		483,000			116,000			208,000			159,000
Contribution margin		452,000			153,000			201,000			98,000
Fixed expenses:
Advertising, traceable		69,300			8,700			40,300			20,300
Depreciation of special equipment		44,100			20,800			7,800			15,500
Salaries of product-line managers		114,500			40,600			38,800			35,100
Allocated common fixed expenses*		187,000			53,800			81,800			51,400
Total fixed expenses		414,900			123,900			168,700			122,300
Net operating income (loss)	$	37,100		$	29,100		$	32,300		$	(24,300)

*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.