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 Dirt Bikes $ 926,000 465,000 461,000 $ 269,000 111,000 158,000 Mountain Bikes $ 404,000 198,000 Racing Bikes $ 253,000 156,000 206,000 97,000 69,300 8,600 40,200 20,500 43,900 20,800 7,400 15,700 115,800 40,900 38,600 36,300 185,200 53,800 80,800 50,600 414,200 124,100 167,000 123,100 $ 46,800 $ 33,900 $ 39,000 $ (26,100) 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