The Regal Cycle Company manufactures three types of bicycles$-$a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow:

$\backslash$table$[[,$Mountain$],[$Sales$,$Total,Dirt Bikes,Bikes,Racing Bikes,$],[$Variable manufacturing and selling expenses,$$935,000,$$$269,000,$$$408,000,$$$258,000,],[$Contribution margin,$458,000,114,000,191,000,153,000,],[$Fixed expenses:,$477,000,155,000,217,000,105,000,],[$Advertising$,$ traceable,$69,600,8,300,40,500,20,800,],[$Depreciation of special equipment,$43,900,20,600,7,400,15,900,],[$Salaries of product$-$line managers,$114,800,40,700,38,600,35,500,],[$Allocated common fixed expenses$*,187,000,53,800,81,600,51,600,],[$Total fixed expenses,$415,300,123,400,168,100,123,800,],[$Net operating income $($loss$),$$$61,700,$$$31,600,$$$48,900,$$$(18,800),]]$

"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:

What is the financial advantage $($disadvantage$)$ per quarter of discontinuing the Racing Bikes?

$2$ Should the production and sale of racing bikes be discontinued?

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.