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 Sales Total $ 300,000 Dirt Bikes $90,000 Mountain Bikes $ 150,000 Racing Bikes $ 60,000 Variable manufacturing and selling expenses i 120,000 27,000 60,000 33,000 Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses Total fixed expenses 180,000 63,000 90,000 27,000 30,000 10,000 14,000 6,000 23,000 6,000 9,000 8,000 35,000 12,000 13,000 10,000 60,000 18,000 30,000 12,000 148,000 46,000 66,000 36,000 Net operating income (loss) Allocated on the basis of sales dollars $ 32,000 $ 17,000 $ 24,000 $ (9,000) 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.