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 Dirt Bikes $ 935,000 467,000 468,000 $ 269,000 115,000 154,000 Mountain Bikes $ 408,000 200,000 208,000 Racing Bikes $ 258,000 152,000 106,000 69,800 8,800 40,800 20,200 43,800 20,300 8,000 15,500 114,300 40,600 38,200 35,500 187,000 53,800 81,600 51,600 414,900 123,500 168,600 122,800 $ 53,100 $ 30,500 $ 39,400 $ (16,800) 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?