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	$	924,000		$	262,000		$	404,000		$	258,000
Variable manufacturing and selling expenses		476,000			118,000			207,000			151,000
Contribution margin		448,000			144,000			197,000			107,000
Fixed expenses:
Advertising, traceable		69,800			8,700			40,800			20,300
Depreciation of special equipment		44,300			20,700			8,000			15,600
Salaries of product-line managers		115,800			40,700			39,000			36,100
Allocated common fixed expenses*		184,800			52,400			80,800			51,600
Total fixed expenses		414,700			122,500			168,600			123,600
Net operating income (loss)	$	33,300		$	21,500		$	28,400		$	(16,600)

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.