The Regal Cycle 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	$ 921,000	$ 268,000	$ 402,000	$ 251,000
Variable manufacturing and selling expenses	469,000	112,000	203,000	154,000
Contribution margin	452,000	156,000	199,000	97,000
Fixed expenses:
Advertising, traceable	69,800	8,600	40,500	20,700
Depreciation of special equipment	43,700	20,100	7,900	15,700
Salaries of product-line managers	114,100	40,300	38,100	35,700
Allocated common fixed expenses*	184,200	53,600	80,400	50,200
Total fixed expenses	411,800	122,600	166,900	122,300
Net operating income (loss)	$ 40,200	$ 33,400	$ 32,100	$ (25,300)

*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:

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

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.