dirt bike, a mountain bike, and a racing The Regal Cycle Company manufactures three types of bicycle bike. Data on sales and expenses for the past quarter follow MountainRacing Total Bikes Bikes Bikes $ 925,000 $ 268,000 $401,000 $258,000 479,000 115,000 208,000 156,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: 446,000 153,000 193000 100,000 69,300 8,300 40,600 20,400 800 15,400 114,500 40,500 38,600 35,400 185,000 53,600 80,200 51,200 43,800 20,600 7, Depreciation of special equipment Salaries of product-ine managers Allocated common foxed expenses 412,600 123,000 167,200 122,400 Total fixed expenses Net operating income (loss) $ 33,400 30,000 25,800 (22.400) Allocated on the basis of sales dollars Management is concemed 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: 1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.) Total If Racing Bikes Are Dropped Operating Income Increase or Current Total Contribution margin (loss) Fixed expenses Total fixed expenses Net operating income (loss)