value: 20.00 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: Dirt Mountain Racing Total 474,000 452,000 Bikes 112,000 150,000 Bikes 202,000 204,000 Bikes 160,000 98,000 $926,000 $262,000 $ 406,000 $ 258,000 Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment Salaries of product-line managers Allocated common fixed expenses* 70,600 43,500 114,600 185,200 8,900 20,800 41,000 52,400 41,000 7,200 38,100 81,200 20,700 15,500 35,500 51,600 Total fixed expenses 413,900 123,100 167,500 123,300 Net operating income (loss) $ 38,100 $ 26,900 $ 36,500 $ (25,300) 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