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: Dirt Mountain Racing Total Bikes Bikes Bikes 5 925,000 $268,000 $ 400,000 $257,000 477,000 113,000 209,000 155,000 448,000 155,000 192,000 102.000 Sales Variable manufacturing and selling expenses Contribution margin Paxed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers allocated common fixed expenses Total fixed expenses Net operating income (lons) 69,400 8,300 40.800 20,300 44,000 20,700 7.900 15,400 113,600 40,000 38,300 35,300 185,000 53,600 80,000 51,400 412.000 122,600 167,000 122,400 $ 35,000 $ 32,400 $ 24.000 8(20,400) "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 rosale value and does not wear out Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order? Financial advantage $ 17,820 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: Dirt Mountain Racing Total Bikes Bikes Bikes 5 925,000 $268,000 $ 400,000 $257,000 477,000 113,000 209,000 155,000 448,000 155,000 192,000 102.000 Sales Variable manufacturing and selling expenses Contribution margin Paxed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers allocated common fixed expenses Total fixed expenses Net operating income (lons) 69,400 8,300 40.800 20,300 44,000 20,700 7.900 15,400 113,600 40,000 38,300 35,300 185,000 53,600 80,000 51,400 412.000 122,600 167,000 122,400 $ 35,000 $ 32,400 $ 24.000 8(20,400) "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 rosale value and does not wear out Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order? Financial advantage $ 17,820