Check my work 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: Total Dirt Bikes Mountain Bikes Racing Bikes 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) $ 931,000 $268,000 $ 405,000 $258,000 457,000 111,000 194,000 152,000 474,000 157,000 211,000 106,000 68,900 8,300 43,200 20,200 40,400 20, 200 7,800 15, 200 114,700 40,700 38,300 35,700 186,200 53,600 122,800 81,000 51,600 167,500 122,700 61,000 $ 34,200 $ 43,500 $(16,700) 413,000 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 resale value and does not wear out. Required: