4. The alternative reality of the "dropping a product" scenario (10 points) Madison Company sells two items, product A and product B. The company is considering dropping product B. It is expected that sales of product A will increase by 30% as a result - along with similar increases in direct materials and direct tabor. Dropping product B will allow the company to cancel some equipment rentals that cost $1100 per month. The other leases cannot be cancelled in the short-term. Madison's overhead is allocated and will continue regardless of the decision made. A condensed, budgeted monthly income statement with both products follows: Product A Product B CC Total Sales $10,000 $ 6,000 $ 16,000 Direct materials 2,500 2,000 4,500 Direct labor 2,000 1,300 3,300 Equipment rental 1,300 1,800 3,100 Allocated overhead 2,000 1,200 3,200 Operating income $ 2,200 ($300) $ 1,900 Required: Prepare an incremental analysis to determine the financial effect of dropping product B