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 Total $ 927,000 473,000 454,000 Dirt Bikes $ 265,000 116,000 149,000 69,400 43,300 114,400 185,400 412,500 $ 41,500 Mountain Bikes $ 405,000 197,000 208,000 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. Management is considering discontinuing the racing bikes. The special equipment used to produce racing bikes has no resale value and does not wear out. 8,400 20,300 41,000 53,000 122,700 $ 26,300 Racing Bikes $ 257,000 160,000 97,000 40,500 20,500 7,700 15,300 38,200 35,200 51,400 81,000 167,400 122,400 $ 40,600 $ (25,400) 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?

he Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and xpenses for the past quarter follow: 'Allocated on the basis of sales dollars. 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 recing bikes be discontinued? What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 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? Complete this question by entering your answers in the tabs below. Should the production and sale of racing bikes be discontinued