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 Total Bikes Bikes Sales Variable manufacturing and selling $928,000 $265,000 405,000 258,000 155,000 471,000 113,000 203,000 expenseS Contribution margin Fixed expenses: 457,000 152,000 202,000 103,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 69,400 43,300 20,400 20,500 15,100 36,400 51,600 123,600 $43,500 29,400 34,700 $(20,600) 40,500 7,800 38,000 81,000 413,500 122,600 167,300 8,400 Chapter 12 Homework Total fixed expenses Net operating income (loss) 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