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 Bikes Racing Total Bikes $ 918,000 $ 263,000 $ 401,000 $ 254,000 469,000 115,000197,000 157,000 Sales Variable manufacturing and selling expenses Contribution margirn Fixed expenses 449,000 148,000204,000 97,000 70,000 43,500 115,200 183,600 8,500 20,700 40,400 52,600 40,900 7,200 38,400 80,200 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 20,600 15,600 36,400 50,800 Total fixed expenses 412,300 122,200166,700 123,400 Net operating income (loss) $ 36,700 25,800 $ 37,300 $ (26,400) 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