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Question: soar incorporated is considering eliminating its mountain bike division which...

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Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,051,000 and the variable costs were $861,000. The fixed costs of the division were $194,000. 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 $58,200 decrease $131,800 decrease $54,200 decrease $190,000 increase $190,000 decrease
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