Assume Kroger$\text{'}$s grocery store is deciding whether to eliminate the salad bar section of its stores. The product line income statement shows the following quarterly data for the salad bar$$ operations:

Sales revenue$=$ $ $750$ comma $000$

Fixed costs$=$ $ $100$ comma $000$

Variable costs$=$ $ $600$ comma $000$

$1.$

Only $ $20$ comma $000$ of fixed costs can be eliminated if the salad bar is eliminated. The remaining $ $80$ comma $000$ of fixed costs are unavoidable. What will happen to Kroger$\text{'}$s operating income if it 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 olive$$ bar, which is projected to bring in $ $200$ comma $000$ of contribution margin each quarter while incurring no additional fixed costs. What will happen to Kroger$\text{'}$s operating income if it replaces the salad bars with olive$$ bars?