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: Dirt Mountain Racing Bikes $928,000 $262,000 $ 409,000 257,000 483,000 119,000 206,000 158,000 Total Bikes Bikes Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: 445,000 143,000 203,000 99,000 Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 8,500 43,400 20,400 40,600 185,600 52,400 68,900 7,400 38,500 81,800 20,300 15,600 36,500 51,400 115,600 Total fixed expenses 413,500 121,900 167,800 123,800 Net operating income (loss) 31,500 21,100 35,200 $ (24,800) 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