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I need help with this! The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on

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The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Sales Variable manufacturing and selling expenses Dirt Mountain Racing Total Bikes Bikes Bikes $ 935,000 $ 267,000 $ 409,000 $ 259,000 473,000 118,000 203,000 152,000 Contribution margin 462,000 149,000 206,000 107,000 Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 69,400 42,700 114,900 187,000 8,700 20,200 40,800 53,400 40,400 7,400 38,600 81.800 20,300 15,100 35,500 51,800 Total fixed expenses 414,000 123,100 168,200 122,700 Net operating income (loss) $ 48,000 $ 25,900 $ 37,800 $ (15,700) *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 1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.) Current Total Difference: Net Total If Racing Operating Income ncrease or (Decrease) Contribution margin (loss) Fixed expenses: o o o Total fixed expenses Net operating income (loss) o 0 $ o o $ 0 $ 0

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