QUESTION:

GTA Cycle sells a variety of bicycles: Comfort, Road, and Mountain bikes. Sales of the Mountain bikes have fallen off.

The following information is available:

MountainComfortRoadSales revenue$375,000$975,000$225,000Variable costs$312,500$600,000$112,500Fixed costs$75,000$210,000$50,000Operating income-$12,500$165,000$62,500

If the Mountain bike line is dropped, the $75,000 of fixed cost is avoidable.

Calculate the impact on operating income if the Mountain bike line is dropped and answer the following questions.

If the Mountain bike line is dropped, operating income would ________________.

Input the word INCR for increase or DECR for decrease.

by $______________________.

Indicate the dollar amount of the increase or decrease.

Input your answer as a positive number.

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