value: 10.00 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 Bikes Mountain Racing Total Bikes Bikes $ 926,000 $ 269,000 $ 405,000 $ 252,000 478,000 116,000 203,000 159,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: 448,000 153,000 202,000 93,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 70,800 43,800 115,800 185,200 8,900 21,000 40,900 53,800 40,900 7,600 38,300 81,000 21,000 15,200 36,600 50,400 Total fixed expenses 415,600 124,600 167,800 123,200 Net operating income (loss) $ 32,400 $ 28,400 S 34,200 $ (30,200) 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)