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	$ 928,000	$ 268,000	$ 404,000	$ 256,000
Variable manufacturing and selling expenses	460,000	112,000	191,000	157,000
Contribution margin	468,000	156,000	213,000	99,000
Fixed expenses:
Advertising, traceable	69,200	8,200	40,200	20,800
Depreciation of special equipment	43,600	20,200	8,000	15,400
Salaries of product-line managers	116,000	40,700	38,900	36,400
Allocated common fixed expenses*	185,600	53,600	80,800	51,200
Total fixed expenses	414,400	122,700	167,900	123,800
Net operating income (loss)	$ 53,600	$ 33,300	$ 45,100	$ (24,800)

*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:

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.

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.

	Totals	Dirt Bikes	Mountain Bikes	Racing Bikes
Sales	$928,000	$268,000	$404,000	$256,000
Variable manufacturing and selling expenses	460,000	112,000	191,000	157,000
Contribution margin (loss)	468,000	156,000	213,000	99,000
Traceable fixed expenses:
Advertising, traceable	69,200	8,200	40,200	20,800
Depreciation of special equipment	43,600	20,200	8,000	15,400
Salaries of the product line managers	116,000	40,700	38,900	36,400
Total traceable fixed expenses	228,800	69,100	87,100	72,600
Product line segment margin (loss)	239,200	$86,900	$125,900	$26,400
Common fixed expenses
Net operating income (loss)	$239,200

What is the common fixed expenses?