es 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: 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) *Allocated on the basis of sales dollars. Total $ 917,000 471,000 446,000 Dirt Bikes $ 265,000 115,000 150,000 Mountain Bikes $ 401,000 197,000 204,000 Racing Bikes $ 251,000 159,000 92,000 70,100 8,900 40,800 20,400 43,500 20,700 7,400 15,400 114,600 40,700 38,900 35,000 183,400 53,000 80,200 50,200 411,600 123,300 167,300 121,000 $ 34,400 $ 26,700 $ 36,700 $ (29,000) 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?