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 $ 924,000 Dirt Bikes 477,000 447,000 $ 266,000 115,000 151,000 Mountain Bikes $ 403,000 Racing Bikes $255,000 204,000 199,000 158,000 97,000 70,000 8,700 40,600 20,700 43,600 20,200 7,600 15,000 114,100 40,600 38, 200 35,300 184,800 53,200 80,600 51,000 412,500 122,700 167,000 122,800 $34,500 $ 20,300 $32,000 $ (25,000) 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 Required: