3 of 4 MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age and includes tours" of a hypothetical town. Two products. The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production, MSI's information related to the ToddleTown Tours collection follows: inces Segmented Income Statement for MSI'S ToddleTown Tours Product Lines Post Pet Store Grocery office Parade Getaway Polka Total Sales revenue $100,000 $95,000 $29,000 $224,000 Variable costs 43,000 39,000 24,000 106,000 Contribution margin $ 57,000 $56,000 $ 5,000 $118,000 Less: Direct Fixed costs 6,800 6.100 4,700 17,600 Segment margin $ 50,200 $49,900 $ 300 $100,400 Less Common fixed costs. 5,000 4.750 1,450 11,200 Net operating income (loss) $ 45,200 $45,150 $(1.150) $ 89,200 "Allocated based on total sales revenue. MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products. Required: 1. Calculate the incremental effect on profit if the POP product is eliminated. Des 4 *Allocated based on total sales revenue. MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products. Required: 1. Calculate the incremental effect on profit if the POP product is eliminated. 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1.000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the labs below. Reg 1 Reg 2 Reg 3A Req 38 Calculate the incremental effect on profit if the POP product is eliminated. Effect on Profit RoH Reg 2 > 115 e ints remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products. Required: 1. Calculate the incremental effect on profit if the POP product is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,000 of the common fixed costs could be avoided if the POP product line were eliminated, 3-b. Should MSI drop the POP product? eBook Hint eferences Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 38 Should MSI drop the POP product? Should MSI drop the POP product? eBook 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1.000 of the common fixed costs ce be avoided if the POP product line were eliminated 3-b. Should MSI drop the POP product? References Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 38 Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,000 of the common fixed costs could be avoided if the POP product line were eliminated. Effect on Profit based on total sales revenue. Part 3 of 4 15 points MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products. Required: 1. Calculate the incremental effect on profit if the POP product is eliminated. 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,000 of the common fixed costs could be avoided if the POP product line were eliminated 3-b. Should MSI drop the POP product? eBook References Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 ReQ JA Reg 30 Should MSI drop the POP product? Should MSI drop the POP product?
