37. (6 points) Bartlet Company has three product lines in its retail stores: books, videos, and music. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below: Books Music Videos Total 1,000 2,000 2,000 5,000 Revenue $24,000 $48,000 $30,000 $102,000 Variable departmental costs 15,000 22,000 23,000 60,000 Fixed costs 7,400 14,800 12,800 35,000 Net income (loss) $1,600 $11,200 $(5,800) $ 7,000 Dropping a product line would not eliminate any fixed costs for Bartlet. a) Prepare an incremental analysis of the effect of dropping the Video product line. Units sold

37. (6 points) Bartlet Company has three product lines in its retail stores: books, videos, and music. Demand of individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below: Books Music Videos Total Units sold 1,000 2,000 2,000 5,000 Revenue $24,000 $48,000 $30,000 $102,000 Variable departmental costs 15,000 22,000 23,000 60,000 Fixed costs 7,400 14,800 12,800 35,000 Net income (loss) $ 1,600 $11,200 $ (5,800) $ 7,000 Dropping a product line would not eliminate any fixed costs for Bartlet. a) Prepare an incremental analysis of the effect of dropping the Video product line.