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 Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable. Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* Total fixed expenses Net operating income (loss) "Allocated on the basis of sales dollars. Total $ 931,000 Dirt Bikes 465,000 $ 268,000 117,000 Mountain Bikes $ 405,000 193,000 Racing Bikes $ 258,000 155,000 466,000 151,000 212,000 103,000 69,300 8,500 40,200 20,600 43,200 20,700 7,400 15,100. 115,600 40,800 38,600 36,200 186,200 53,600 81,000 51,600 414,300 123,600 167,200 123,500 $ 51,700 $ 27,400 $ 44,800 $ (20,500) 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.