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: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 927,000 $ 266,000 $ 407,000 $ 254,000 Variable manufacturing and selling expenses 478,000 115,000 207,000 156,000 Contribution margin 449,000 151,000 200,000 98,000 Fixed expenses: Advertising, traceable 70,100 8,700 40,400 21,000 Depreciation of special equipment 43,500 20,500 7,800 15,200 Salaries of product-line managers 113,500 40,100 38,000 35,400 Allocated common fixed expenses* 185,400 53,200 81,400 50,800 Total fixed expenses 412,500 122,500 167,600 122,400 Net operating income (loss) $ 36,500 $ 28,500 $ 32,400 $ (24,400) *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.) 2a. Prepare a segmented income statement.