value 1.00 points 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 Sales $920,000 $ 261,000 $ 408,000 $ 251,000 470,000 115,000 200,000 55,000 Variable manufacturing and selling expenses Contribution margin Fixed expenses 450,000 146,000 208,000 96,000 69,200 43,400 114,000 184,000 8,300 20,600 40,300 52,200 40,600 7,300 38,600 81,600 20,300 15,500 35,100 50,200 Advertising, traceable Depreciation of special equipment Salaries of product-line manager Allocated common fixed expenses* Total fixed expenses 410,600 121,400 168,100 121,100 Net operating income (loss) S 39,400 24,600 39,900 S (25,100) 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 Operating Income Increase or (Decrease) Total If Current Total Racing Bikes Are Dropped Contribution margin (loss) Fixed expenses Total fixed expenses Net operating income (loss)