What is the financial advantage (disadvantage) per quarter of discontinuing the racing bikes?

The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Dirt Mountain Racing Total Bikes Bikes Bikes $ 924,000 $267,000 $ 404,000 $ 253,000 464,000 113,000 196,000 155,000 460,000 154,000 208,000 98,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses : Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) 69, 700 8,600 40,500 20,600 43,200 20,500 7,100 15,600 114,000 40,100 38,800 35, 100 184,800 53,400 80,800 50, 600 411,700 122,600 167,200 121,900 $ 48,300 $ 31,400 $ 40,800 $(23,900) *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