Assume Keone's grocery stores deciding whether to eliminate the salad bar section of its stores. The product ine income statement shows the following quarterly data for the salad ber operations Sales revenue - $900,000 Fixed costs $90,000 Variable costs $770,000 1. Only $10,000 of foxed costs can be eliminated if the salad bar is eliminated. The remaining $80,000 of foued costs are unavoidable. What will happen to Keene's operating income discontinues the salad bars and does nothing with the freed capacity 2. Management is thinking about replacing the salad bar section of the stores with a specialty live bar, which is projected to bring in $150.000 of contribution marginach quarter while incurring no additional fixed coils. What will happen to Keene's operating income if it replaces the salad bars with over? 1 Only $10.000 of fixed costs can be eliminated the salad bar is eliminated. The remaining $80.000 of feed costs are unavoidabin. What will happen to Keone's operating income ? Gscontinues the salad bars and does nothing with the freed capacity? Incremental Analysis for Discontinuation Decinion Sales revenue from salad bars Total Contribution margin lost it salad bars are discontinued Operating Income lost if salad bars are discontinued 2. Management is thinking about replacing the salud bar section of the stores with a specialty olive bar, which is projected to bring in $150,000 of contribution margin gach quarter while incurring no additional fixed costs. What will happen to Kone's operating income it replaces the stad born with oilve bars? (Uve a mirus tign or parentheses for a decrease in operating income.) 1 Salad Bars are Replaced with Olive Bars Contribution margin provided by olive bar Total Increase (Decrease in operating income from replacing salad bars with olive bars