Sales $ 931,000 $ 268,000 $ 407,000 $ 256,000 Variable manufacturing and selling expenses 471,000 114,000 204,000 153,000 Contribution margin 460,000 154,000 203,000 103,000 Fixed expenses: Advertising, traceable 69,500 8,600 40,600 20,300 Depreciation of special equipment 44,300 20,600 7,800 15,900 Salaries of product-line managers 115,300 40,300 38,500 36,500 Allocated common fixed expenses* 186,200 53,600 81,400 51,200 Total fixed expenses 415,300 123,100 168,300 123,900 Net operating income (loss) $ 44,700 $ 30,900 $ 34,700 $ (20,900)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 References profitability of the various product lines.