The impact on operating income for eliminating

Reference no: EM131022232

29] Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $2,000. The division sales for the year were $1,040,000 and the variable costs were $850,000. The fixed costs of the division were $183,000. 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:

$54,900 decrease
$135,100 decrease
$52,900 decrease
$190,000 increase
$190,000 decrease

Reference no: EM131022232

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