Total	Dirt Bikes	Mountain Bikes	Racing Bikes
Sales	$ 924,000	$ 264,000	$ 410,000	$ 250,000
Variable manufacturing and selling expenses	488,000	119,000	210,000	159,000
Contribution margin	436,000	145,000	200,000	91,000
Fixed expenses:
Advertising, traceable	69,300	8,300	40,200	20,800
Depreciation of special equipment	44,200	20,600	7,700	15,900
Salaries of product-line managers	115,600	40,600	38,200	36,800
Allocated common fixed expenses*	184,800	52,800	82,000	50,000
Total fixed expenses	413,900	122,300	168,100	123,500
Net operating income (loss)	$ 22,100	$ 22,700	$ 31,900	$ (32,500)

*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.