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Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for...

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Accounting

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Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $1,000. The division sales for the year were $1,048,000 and the variable costs were $858,000. The fixed costs of the division were $191,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The Impact on operating income for eliminating this business segment would be: Multiple Choice $57,300 decrease $190,000 increase O $190,000 decrease $56,300 decrease $132,700 decrease

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