Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,040,000 and the variable costs were $861,000. The fixed costs of the division were $183,000. 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:

Multiple Choice

• $179,000 increase

• $54,900 decrease

• $124,100 decrease

• $50,900 decrease

• $179,000 decrease