value: 10.00 points 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: Mountain Racing Bikes $918,000 $263,000 $ 401,000 $ 254,000 478,000 115,000 204,000 59,000 Dirt Bikes Total Bikes Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses 440,000 148,000 197,000 95,000 69,800 Advertising, traceable Depreciation of special equip Salaries of product-line managers Allocated common fixed expenses* 43,200 114,300 183,600 20,300 40,100 52,600 8,300 41,000 20,500 7,600 38,200 80,200 15,300 36,000 50,800 Total fixed expenses 410,900 121,300 167,000 122,600 Net operating income (loss) $ 29,100 26,700 $ 30,000 $ (27,600) 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