The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total Dirt Bikes Mountain Bikes Racing Bikes Sales $ 929,000 $ 270,000 $ 403,000 $ 256,000 Variable manufacturing and selling expenses 465,000 116,000 195,000 154,000 Contribution margin 464,000 154,000 208,000 102,000 Fixed expenses: Advertising, traceable 69,600 8,400 40,900 20,300 Depreciation of special equipment 43,700 20,500 7,300 15,900 Salaries of product-line managers 114,900 40,400 38,300 36,200 Allocated common fixed expenses* 185,800 54,000 80,600 51,200 Total fixed expenses 414,000 123,300 167,100 123,600 Net operating income (loss) $ 50,000 $ 30,700 $ 40,900 $ (21,600) *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.