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 Mountain Racing Total Bikes Bikes Bikes $924.000 $268,000 $402,000 $254,000 Sales Variable manufacturing and selling expenses 471.000 118.000 199,000 154,000 Contribution margin 453.000 150,000 203.000 100.000 Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 69,800 43,600 115,000 184,800 8,600 20,900 41,000 53,600 40,400 7,100 38,200 80,400 20,800 15,600 35,800 50.800 Total fixed expenses 413,200 124,100 166,100 123,000 $ 39,800 $ 25,900 $ 36,900 $ (23,000) Net operating income (loss) Required: 1a. What is the impact on net operating income by discontinuing racing bikes? (Decreases should be indicated by a minus sign.) Total If Current Total Racing Bikes Are Dropped Difference: Net Operating Income Increase or (Decrease) Contribution margin (loss) Fixed expenses: Total fixed expenses Net operating income (loss) 1b. Should production and sale of the racing bikes be discontinued? Yes 2a. Prepare a segmented income statement. Totals Dirt Bikes Mountain Bikes Racing Bikes Contribution margin (loss) Traceable fixed expenses: Total traceable fixed expenses Net operating income (loss)