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) Total $ 913,000 480,000 Dirt Bikes Mountain Bikes $ 401,000 207,000 Racing Bikes $251,000 157,000 $261,000 116,000 433,000 145,000 194,000 94,000 69,900 9,000 40,600 20,300 43,600 20,600 7,200 15,800 116,500 40,700 38,900 36,900 182,600 52,200 80,200 50,200 412,600 122,500 166,900 123,200 $ 20,400 $ 22,500 $ 27,100 $ (29,200) "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