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Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $6,600 as shown below. Segment Income
Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $6,600 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,140,000 896,000 244,000 250,600 $ (6,600) If the mountain bike division is dropped, all $896,000 of its variable costs are avoidable, and $75,180 of its fixed costs are avoidable. The impact on income for eliminating this business segment would be:
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