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	$	918,000		$	261,000		$	406,000		$	251,000
Variable manufacturing and selling expenses		458,000			111,000			192,000			155,000
Contribution margin		460,000			150,000			214,000			96,000
Fixed expenses:
Advertising, traceable		69,700			8,800			40,100			20,800
Depreciation of special equipment		44,000			20,700			7,500			15,800
Salaries of product-line managers		116,200			41,000			38,500			36,700
Allocated common fixed expenses*		183,600			52,200			81,200			50,200
Total fixed expenses		413,500			122,700			167,300			123,500
Net operating income (loss)	$	46,500		$	27,300		$	46,700		$	(27,500)

*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. 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.