3 Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2] 00:47:06 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 $ 927,000 476,000 451,000 $ 269,000 118,000 151,000 Mountain Bikes $ 401,000 201,000 200,000 Racing Bikes $ 257,000 157,000 100,000 69,000 8,200 40,600 20, 200 43,500 20,500 7,700 15,300 116,300 40,500 38,900 36,900 185,400 53,800 80,200 51,400 414,200 123,000 167,400 123,800 $ 36,800 $ 28,000 $ 32,600 $ (23,800) 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? < Required 1 Required 2 >