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	$	929,000		$	261,000		$	409,000		$	259,000
Variable manufacturing and selling expenses		478,000			116,000			209,000			153,000
Contribution margin		451,000			145,000			200,000			106,000
Fixed expenses:
Advertising, traceable		70,400			8,600			41,000			20,800
Depreciation of special equipment		44,400			20,900			7,600			15,900
Salaries of product-line managers		115,800			40,300			38,500			37,000
Allocated common fixed expenses*		185,800			52,200			81,800			51,800
Total fixed expenses		416,400			122,000			168,900			125,500
Net operating income (loss)	$	34,600		$	23,000		$	31,100		$	(19,500)

*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.) 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.

*NOTE From Poster* If you are using excel to answer this problem, please include your formulas for how you obtained the numbers in your cells for each part. Thank you sincerely for your time!