o Assume Kader's grocery store is deciding whether to eliminate the salad bar section of its stores. The product the income statement shows the following quartery duta for the salad bar operations Sales revenue - $420,000 Fixed costs $150,000 Variable costs $500,000 Only $30.000 of fixed costs can be eliminated if the salad bar is eliminated. The remaining S120,000 of fixed costs are unavoidable. What will happen to Kader's operating income il discontinues the seat ben und does nothing with the freed capacity? Management is thinking about replacing the salad bar section of the stores with a specialty olive bar, which is projected to bring in $230,000 of contribution margin each quarter while nog notional and costs. What will conto Kaden's operating income it replaces the salad bars with olive bars? 1. 2. 1. Only $30,000 of fxed costs can be eliminated the salad bar is eliminated. The remaining $120.000 of fixed costs are unavoidable. What will happen to Kader's operating income il discontinue the bars and does nothing with the freed capacity Incremental Analysis for Discontinuation Decision Total Sales revenue from salad bars Contribution margin lost it salad bars are discontinued Operating income lost if salad bars are discontinued 2. Management is thinking about replacing the salad bar section of the stores with a specialty olive bar, which is projected to bring in $230,000 of contribution margineach quarter while nourring no additional food. What will happen to Kader's operating income if it replaces the salad bars with olive bars? (Use a minus sign or parentheses for a decrease in operating income) Salad Bars are Replaced with Olive Bars Total Contribution margin provided by olive bar Increase Decrease) in operating income from replacing salad bars with olive bars