Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $1,000. The division sales for the year were $1,048,000 and the variable costs were $858,000. The fixed costs of the division were $191,000. 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

• $57,300 decrease
• $132,700 decrease
• $56,300 decrease
• $190,000 increase
• $190,000 decrease