he Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow:

	Total			Dirt Bikes			Mountain Bikes			Racing Bikes
Sales	$	928,000		$	266,000		$	410,000		$	252,000
Variable manufacturing and selling expenses		472,000			117,000			203,000			152,000
Contribution margin		456,000			149,000			207,000			100,000
Fixed expenses:
Advertising, traceable		69,800			8,100			40,900			20,800
Depreciation of special equipment		43,800			20,600			7,600			15,600
Salaries of product-line managers		115,300			40,600			38,100			36,600
Allocated common fixed expenses*		185,600			53,200			82,000			50,400
Total fixed expenses		414,500			122,500			168,600			123,400
Net operating income (loss)	$	41,500		$	26,500		$	38,400		$	(23,400)

*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?