9 Exercise 13-2 (Algo) Dropping or Retaining a Segment [LO13-2] 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. Mountain Bikes Racing Bikes $ 400,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers Allocated connon fixed expenses* Total fixed expenses Net operating incone (loss) "Allocated on the basis of sales dollars. Total $ 927,000 Dirt Bikes $267,000 $260,000 463,000 117,000 193,000 153,000 464,000 150,000 207,000 107,000 68,900 8,600 40,100 20,200 42,900 20,200 7,600 15,100 115,400 40,900 38,500 36,000 185,400 53,400 80,000 52,000 412,600 123,100 166,200 123,300 $ 51,400 $ 26,900 $ 40,800 $ (16,300) 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the production and sale of racing bikes be discontinued? < Required 1 Required 2 >