Exercise 12-2 Dropping or Retaining a Segment [L012-21 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 Total Bikes 926,000 266,000 405,000 255,000 Variable manufacturing 471,000 116,000 202.000 153,000 and selling Contribution 455,000 150.000 203.000 102,000 margin Advertising. 69,700 8.300 40,700 20,700 traceable Depreciation of special 42,900 20.200 15,100 7,600 equipment Salaries of product-line 40,200 114.800 38,300 36.300 managers Allocated common fixed 185,200 53,200 81.000 51,000 expenses Total fixed 412,600 167,600 121,900 123,100 Net operating 28.100 42,400 35,400 (21,100) income (loss)