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Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the...

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Accounting

Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $3,000 as shown below. Segment Income (Loss) Sales $ 1,050,000 Variable costs 860,000 Contribution margin 190,000 Fixed costs 193,000 Income (loss) $ (3,000) If the mountain bike division is dropped, all $860,000 of its variable costs are avoidable, and $57,900 of its fixed costs are avoidable. The impact on income for eliminating this business segment would be:

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