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 Bikes $ 270,000 114,000 Mountain Bikes $401,000 194,000 156,000207000_95,000 Racing Bikes $252,000 157,000 Total Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses S 923,000 465,000 458,000 68,800 44,500 115,000 184,600 8.100 20,800 40,700 54,000 40,600 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 20,100 15,900 36,100 50,400 7,800 38,200 80.20000- 412,900 45,100 123,600 122,500 Total fixed expenses Net operating income (loss) 166,800 32,40040,200$ (27,500) 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.) Difference: Net Total If Racing Bikes Are Operating Income Increase or Decrease) Current Total Dropped Contribution margin (loss) Fixed expenses Total fixed expenses Net operating income (loss)