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 Total 485,000 445,000 Bikes 118,000 152,000 Bikes 209,000 195,000 Bikes 158,000 98,000 Sales $930,000 $270,000 $ 404,000 $ 256,000 Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 70,100 42,900 116,400 186,000 8,900 20,300 40,600 54,000 40,400 7,300 38,900 80,800 20,800 15,300 36,900 51,200 Total fixed expenses 415,400 123,800 167,400 124,200 Net operating income (loss) $ 29,600 $ 28,200 $ 27,600 $ (26,200) 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