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

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Accounting

Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $9,000. The division sales for the year were $1,056,000 and the variable costs were $866,000. The fixed costs of the division were $199,000. 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:

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