The 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: 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 $ 921,000 466,000 $ 268,000 116,000 Mountain Bikes $ 401,000 Racing Bikes $ 252,000 192,000 158,000 455,000 152,000 209,000 94,000 69,400 8,700 40,300 20,400 43,800 20,800 7,400 15,600 114,900 40,400 38,400 36,100 184,200 53,600 80,200 50,400 412,300 123,500 166,300 122,500 $ 42,700 $ 28,500 $ 42,700 $ (28,500) 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?