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	$	920,000		$	266,000		$	404,000		$	250,000
Variable manufacturing and selling expenses		469,000			116,000			202,000			151,000
Contribution margin		451,000			150,000			202,000			99,000
Fixed expenses:
Advertising, traceable		69,600			8,600			40,500			20,500
Depreciation of special equipment		43,300			20,800			7,200			15,300
Salaries of product-line managers		115,400			41,000			39,000			35,400
Allocated common fixed expenses*		184,000			53,200			80,800			50,000
Total fixed expenses		412,300			123,600			167,500			121,200
Net operating income (loss)	$	38,700		$	26,400		$	34,500		$	(22,200)

*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.