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		$	263,000		$	407,000		$	254,000
Variable manufacturing and selling expenses		468,000			113,000			195,000			160,000
Contribution margin		456,000			150,000			212,000			94,000
Fixed expenses:
Advertising, traceable		69,600			8,900			40,300			20,400
Depreciation of special equipment		42,400			20,100			7,200			15,100
Salaries of product-line managers		114,600			40,500			38,100			36,000
Allocated common fixed expenses*		184,800			52,600			81,400			50,800
Total fixed expenses		411,400			122,100			167,000			122,300
Net operating income (loss)	$	44,600		$	27,900		$	45,000		$	(28,300)
*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 or (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.