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 S 934,000 S 285,000 S 409,000 S 260,000 485,000 120,000 194,000 151,000 Variable manufacturing and selling expenses Contribution margin Fixed expenses: 469,000 145,000 215,000 109.000 8,400 20.700 40,000 53,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common foxed expenses* 68,900 43,700 113,900 186,800 40.300 7.300 38,200 81.800 20.200 15,700 35,700 52,000 Total fixed expenses 413,300 122,100 167,600 123,600 Net operating income (loss) S 55,700 22,900 47,400 (14,600) 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 Current Total Increase or Decrease) Contribution margin (loss) Total fioxed expenses Net operating income (loss)