11. Analyzing a Kecp-or-Drop Decision Woodchuck Corp. is considering eliminating a product from its line of outdoor tables. Two products, the Oak-A and Fiesta tables, have impressive sales. However, sales for the Studio model have been dismal Information related to Woodchuck's outdoor table line follows. Segmented Income Statement for Woodchuck's Outdoor Table Products Oak-A Fiesta Studio Total S110,000 $77,000 S33,000 S220,000 5,000 9.00067,000 Sales revenue Variable costs Contribution Allocated fixed APoieod fited s1300000300 $2000 Allocated based on total sales dollars Woodchuck has determined that eliminating the Studio model will cause sales of the Oak-A and the Fiesta tables to increase by 20 percent and 5 percent, respectively. Variable costs for these two models will increase proportionately. Additionally, S1,000 of the fixed cost allocated to the Studio model is avoidable. The remaining fixed overhead currently allocated to the Studio model will be redistributed to the remaining two products. Required: recommendation to Woodchuck? Woodchuck change? Why or why not? 1. Determine what will happen to the company's total profit, if Woodchuck drops the Studio product. What is your 2 Suppose that $4,000 of fixed overhcad allocated to the Studio model is avoidable. Would your recommendation to