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

Dirt Bikes	Mountain Bikes	Racing Bikes	Total
Sales	$90,000	$150,000	$60,000	$300,000

Variable manufacturing and selling expenses	27,000	60,000	33,000	120,000
Contribution Margin	$63,000	$ 90,000	$27,000	$180,000
Fixed expenses
Advertising traceable	10,000	14,000	6,000	30,000

Depreciation of special equipment	6,000	9,000	8,000	23,000
Salaries of product line managers	12,000	13,000	10,000	35,000
Allocated common fixed expense	18,000	30,000	12,000	60,000
Total fixed expenses	$46,000	$66,000	$36,000	$148,000
Net operating income (loss)	$17,000	$24,000	$ (9,000)	$ 32,000

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. Should production and sale of the racing bikes be discontinued? Explain. Show computations to support your answer.