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	$	928,000	$	267,000	$	402,000	$	259,000
Variable manufacturing and selling expenses		461,000		112,000		199,000		150,000
Contribution margin		467,000		155,000		203,000		109,000
Fixed expenses:
Advertising, traceable		70,500		8,900		40,600		21,000
Depreciation of special equipment		44,300		21,000		7,600		15,700
Salaries of product-line managers		114,500		40,500		38,000		36,000
Allocated common fixed expenses*		185,600		53,400		80,400		51,800
Total fixed expenses		414,900		123,800		166,600		124,500
Net operating income (loss)	$	52,100	$	31,200	$	36,400	$	(15,500)

*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.

2a. Prepare a segmented income statement. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Net operating income (loss)