Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $3,400 as shown below Segment Income (Loss) Sales Variable costs Contribution margin $ 1,060,000 864,000 196,000 199,400 $ (3,400) If the mountain bike division is dropped, all $864,000 of its variable costs are avoidable, and $59,820 of its fixed costs are avoidable. The impact on income for eliminating this business segment would be Fixed costs Income (loss) Multiple Choice $196,000 decrease $196,000 increase $56,420 decrease $136,180 decrease $59,820 decrease

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