The Regal Cycle Company manufactures three types of bicycles—adirt bike, a mountain bike, and...

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Accounting

The Regal Cycle Company manufactures three types of bicycles—adirt bike, a mountain bike, and a racing bike. Data on sales andexpenses for the past quarter follow:
Total Dirt
Bikes Mountain Bikes Racing
Bikes
Sales $ 925,000 $ 264,000 $ 405,000 $ 256,000
Variable manufacturing and selling expenses 477,000 117,000 204,000 156,000
Contribution margin 448,000 147,000 201,000 100,000
Fixed expenses:
Advertising, traceable 69,600 9,000 40,400 20,200
Depreciation of special equipment 43,700 20,700 7,500 15,500
Salaries of product-line managers 114,700 40,700 38,200 35,800
Allocated common fixed expenses* 185,000 52,800 81,000 51,200
Total fixed expenses 413,000 123,200 167,100 122,700
Net operating income (loss) $ 35,000 $ 23,800 $ 33,900 $ (22,700)
*Allocated on the basis of sales dollars.
Management is concerned about the continued losses shown by theracing bikes and wants a recommendation as to whether or not theline should be discontinued. The special equipment used to produceracing bikes has no resale value and does not wear out.
Required:
1. What is the financial advantage (disadvantage) per quarter ofdiscontinuing the Racing Bikes?
I know its a financial disadvantage but can't figure out howmuch

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In: AccountingThe Regal Cycle Company manufactures three types of bicycles—adirt bike, a mountain bike, and a...The Regal Cycle Company manufactures three types of bicycles—adirt bike, a mountain bike, and a racing bike. Data on sales andexpenses for the past quarter follow:TotalDirtBikesMountain BikesRacingBikesSales$925,000$264,000$405,000$256,000Variable manufacturing and selling expenses477,000117,000204,000156,000Contribution margin448,000147,000201,000100,000Fixed expenses:Advertising, traceable69,6009,00040,40020,200Depreciation of special equipment43,70020,7007,50015,500Salaries of product-line managers114,70040,70038,20035,800Allocated common fixed expenses*185,00052,80081,00051,200Total fixed expenses413,000123,200167,100122,700Net operating income (loss)$35,000$23,800$33,900$(22,700)*Allocated on the basis of sales dollars.Management is concerned about the continued losses shown by theracing bikes and wants a recommendation as to whether or not theline should be discontinued. The special equipment used to produceracing bikes has no resale value and does not wear out.Required:1. What is the financial advantage (disadvantage) per quarter ofdiscontinuing the Racing Bikes?I know its a financial disadvantage but can't figure out howmuch

	Total		Dirt Bikes		Mountain Bikes		Racing Bikes
Sales	$	925,000	$	264,000	$	405,000	$	256,000
Variable manufacturing and selling expenses		477,000		117,000		204,000		156,000
Contribution margin		448,000		147,000		201,000		100,000
Fixed expenses:
Advertising, traceable		69,600		9,000		40,400		20,200
Depreciation of special equipment		43,700		20,700		7,500		15,500
Salaries of product-line managers		114,700		40,700		38,200		35,800
Allocated common fixed expenses*		185,000		52,800		81,000		51,200
Total fixed expenses		413,000		123,200		167,100		122,700
Net operating income (loss)	$	35,000	$	23,800	$	33,900	$	(22,700)