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 MountainRacing Total Bikes Bilkes Sales Variable manufacturing and seling expenses Contnbution margin Fixed expenses: 5 925,000 S264,000 $409,000S252,000 52,000 100,000 466,00061000194 000 15,000 459,000 151,000 Advertising, traceable Depreclation of special equipment Salaries of product-line managers Allocated common fixed expenses 69,700 42,600 114,000 8,700 20,100 40,200 20,100 15,300 35,200 40,900 7.200 783,00052,800 21,800 5,00081.800 168,500 0-00050.400 21,000 Total fixed expenses 411,300 Net operating income (loss) 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 1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.) Total If Racing Operating Current TotalBikes Are Increase or Dropped Contribution margin (loss) Fixed expenses: Total fixed expenses Net operating income (loss) 1b. Should production and sale of the racing bikes be discontinued? O Yes No 2a. Prepare a segmented income statement Totals ikes kes Contribution margin (loss) Traceable Txed expenses Total traceable xed expenses Net operating income (loss) 2b. Would a segmented income statement format be more usable to management in assessing the long-run profitability of the various product lines. O Yes O No