4 parts but to only 1 question!

	Parade	Grocery Getaway	Polka	Total
Sales Revenue	115000	110000	32000	257000
Variable costs	49000	45000	28000	122000
Contribution Margin	66000	65000	4000	135000
Less: Direct Fixed Costs	7400	7000	3000	17400
Segment Margin	58600	58000	1000	117600
Less: Common Fixed Costs*	5750	5500	1600	12850
Net Operating Income (loss)	52850	52500	(-600)	104750

*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.

2-a. Calculate the incremental effect on profit if the POP product is eliminated.

2-b. Should MSI drop the POP product?

2-c. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,200 of the common fixed costs could be avoided if the POP product line were eliminated.

2-d. Should MSI drop the POP product?