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 $ 929,000 $268,000 464,000 113,000 Bikes $402,000 $259,000 196,000 155,000 Sales Variable manufacturing and selling 113,000 196,000 expenses 155,000 206,000 Contribution margin 465,000 155,000 104,000 Fixed expenses Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 69,700 8,500 44,300 20,800 20,400 7,600 15,900 114,400 40,300 38,50035,600 185,800 53,60080,400 51,800 40,800 123,200 167,300 Total fixed expenses 414,200 123,200 123,700 Net operating income (loss) $ 50,800 $31,800 $ 38,700 $(19,700) 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.) Total If Racing Bikes Are Dropped Difference: Net Operating Income Increase or (Decrease) Current Total Contribution margin (loss) Fixed expenses 0 0 0 Total fixed expenses Net operating income (loss) 0 0 0 0