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 Bikes $916,000 $ 261,000 $402,000 253,000 465,000 117,000 193,000 155,000 Total Bikes Bikes Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: 451,000 44,000 209.000 98,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses 70,800 43,900 113,600 183,200 9,000 20,700 40,200 52,200 40,800 7.900 38,300 80,400 21,000 15,300 35,100 50,600 Total fixed expenses 411,500 122,100 167.400 22,000 Net operating income (loss) $ 39,500 21,900 $ 41,600 S (24,000) 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.) Difference: Net Total If Racing Bikes Are Dropped Operating Income Increase or Current Total (Decrease) Contribution margin (loss) Fixed expenses: Total fixed expenses Net operating income (loss)