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	$ 935,000	$ 267,000	$ 410,000	$ 258,000
Variable manufacturing and selling expenses	458,000	113,000	191,000	154,000
Contribution margin	477,000	154,000	219,000	104,000
Fixed expenses:
Advertising, traceable	70,100	8,800	40,800	20,500
Depreciation of special equipment	44,100	20,700	7,400	16,000
Salaries of product-line managers	115,900	40,200	38,900	36,800
Allocated common fixed expenses*	187,000	53,400	82,000	51,600
Total fixed expenses	417,100	123,100	169,100	124,900
Net operating income (loss)	$ 59,900	$ 30,900	$ 49,900	$ (20,900)

*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.

Answer Asap please