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 $ 920,000 470,000 450,000 $ 265,000 116,000 149,000 Mountain Bikes $ 402,000 198,000 204,000 Racing Bikes $ 253,000 156,000 97,000 69,500 8,400 40,800 20,300 43,400 20,600 7,500 15,300 114,900 40,100 38,600 36,200 184,000 53,000 80,400 50,600 411,800 122,100 167,300 122,400 $ 38,200 $ 26,900 $ 36,700 $ (25,400) 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?