1 Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2] 2 points 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: eBook Sales Hint References 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) *Allocated on the basis of sales dollars. Total Dirt Bikes $ 924,000 479,000 445,000 $ 269,000 118,000 151,000 Mountain Bikes $ 400,000 207,000 193,000 Racing Bikes $ 255,000 154,000 101,000 69,700 8,700 40,700 20,300 43,800 20,300 7,500 16,000 114,300 40,500 38,400 35,400 184,800 53,800 80,000 51,000 412,600 123,300 166,600 122,700 $ 32,400 $ 27,700 $ 26,400 $ (21,700) Management is considering discontinuing the racing bikes. 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes?