Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $6,000. The division sales for the year were $1,053,000 and the variable costs were $863,000. The fixed costs of the division were $196,000. 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

• $190,000 decrease
• $190,000 increase
• $131,200 decrease
• $52,800 decrease
• $58,800 decrease