$*$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:

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

Should MSI drop the POP product?

$3-$a$.$ Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $$2,000$ of the common fixed costs could

be avoided if the POP product line were eliminated.