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	$	926,000		$	268,000		$	402,000		$	256,000
Variable manufacturing and selling expenses		472,000			115,000			200,000			157,000
Contribution margin		454,000			153,000			202,000			99,000
Fixed expenses:
Advertising, traceable		70,100			8,900			40,200			21,000
Depreciation of special equipment		43,300			20,400			7,300			15,600
Salaries of product-line managers		115,200			40,600			38,600			36,000
Allocated common fixed expenses*		185,200			53,600			80,400			51,200
Total fixed expenses		413,800			123,500			166,500			123,800
Net operating income (loss)	$	40,200		$	29,500		$	35,500		$	(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.