1. Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $5,000. The division sales for the year were $1,045,000 and the variable costs were $862,000. The fixed costs of the division were $188,000. 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:

2. Based on a predicted level of production and sales of 37,000 units, a company anticipates total contribution margin of $151,700, fixed costs of $74,000, and operating income of $77,700. Based on this information, the budgeted operating income for 35,000 units would be

3. Dragoo Building Inc. has a crane with a book value of $257,000 and a 4-year remaining life. A new crane is available at a cost of $632,000. Dragoo can also receive $49,700 for trading in the old crane. The new crane will reduce variable costs by $148,200 per year over its four-year life. The total impact to Dragoo over the cranes four-year life is:

4. J&H Company has a router platform with a book value of $84,000 and a 3-year remaining life. A new router platform is available at a cost of $144,000, and J&H can also receive $17,900 for trading in the old router platform. The new router platform will reduce variable manufacturing costs by $32,900 per year over its three-year life. Should the router platform be replaced?

5. Based on a predicted level of production and sales of 29,000 units, a company anticipates total variable costs of $113,100, fixed costs of $52,200, and operating income of $47,030. Based on this information, the budgeted amount of variable costs for 27,000 units would be: