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	$ 929,000	$ 270,000	$ 401,000	$ 258,000
Variable manufacturing and selling expenses	463,000	119,000	193,000	151,000
Contribution margin	466,000	151,000	208,000	107,000
Fixed expenses:
Advertising, traceable	69,900	9,000	40,500	20,400
Depreciation of special equipment	44,100	20,300	8,000	15,800
Salaries of product-line managers	115,700	40,700	38,100	36,900
Allocated common fixed expenses*	185,800	54,000	80,200	51,600
Total fixed expenses	415,500	124,000	166,800	124,700
Net operating income (loss)	$ 50,500	$ 27,000	$ 41,200	$ (17,700)

*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?

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.