The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow:

	Total			Dirt Bikes			Mountain Bikes			Racing Bikes
Sales	$	928,000		$	267,000		$	401,000		$	260,000
Variable manufacturing and selling expenses		458,000			113,000			193,000			152,000
Contribution margin		470,000			154,000			208,000			108,000
Fixed expenses:
Advertising, traceable		70,000			8,700			40,900			20,400
Depreciation of special equipment		43,100			20,800			7,200			15,100
Salaries of product-line managers		114,800			40,800			38,900			35,100
Allocated common fixed expenses*		185,600			53,400			80,200			52,000
Total fixed expenses		413,500			123,700			167,200			122,600
Net operating income (loss)	$	56,500		$	30,300		$	40,800		$	(14,600)

*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.

Required:

1. Should the production and sale of racing bikes be discontinued?