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: Mountain Racing Dirt Bikes Total Bikes Bikes Sales $917,000 $264,000 $ 400,000 S 253,000 466,000 111,000 201,000 154,000 Variable manufacturing and selling expenses Contribution margin Fixed expenses: 451,000 53,000 1 199,000 99,000 8,600 4,200 20,800 40,400 52,800 40,500 8,000 38.400 80,000 69,400 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 20,300 15,400 35,700 50,600 114,500 183,400 Total fixed expenses 411,500 122,600 166,900 22,000 Net operating income (loss) $ 39,500 30,400 32,100 (23,000) 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.) rence: Net Operating Income Increase or Decrease Total If Current Total Racing Bikes Are Dropped Contribution margin (loss) Fixed expenses Total fixed expenses Net operating income (loss)