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

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Accounting

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Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $3,300. The division sales for the year were $1,053,000 and the variable costs were $863,000. The fixed costs of the division were $196,000. 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: O $58,800 decrease O $131,200 decrease $55.500 decrease O $190,000 increase O $190,000 decrease Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,500. The division sales for the year were $950,500 and the variable costs were $470,000. The fixed costs of the division were S522.000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: O $271,700 increase O$480.500 decrease O $208,80o increase O $271700 decrease $480,500 increase

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