Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent...

Transcribed Image Text:

Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $3,000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,050,000 860,000 190,000 193,000 $ (3,000) If the mountain bike division is dropped, all $860,000 of its variable costs are avoidable, and $57,900 of its fixed costs are avoidable. The impact on income for eliminating this business segment would be: Soar Incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $3,000 as shown below. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) $ 1,050,000 860,000 190,000 193,000 $ (3,000) If the mountain bike division is dropped, all $860,000 of its variable costs are avoidable, and $57,900 of its fixed costs are avoidable. The impact on income for eliminating this business segment would be:

Answer rating: 100% (QA)

To calculate the impact on income from eliminating the mountain bike division we ... View the full answer