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:
a. $54,900 decrease
b. $135,100 decrease
c. $52,900 decrease
d. $190,000 increase
e. $190,000 decrease
Answers: 1
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