Dolls R Us sells three products in its retail stores: baby dolls, teenage dolls, and plush dolls. Results of the 4^th quarter are below:

	Baby Dolls	Teenage	Plush	Total
Units sold	1,000	2,000	2,000	5,000
Revenue	$31,000	$43,000	$26,000	$100,000
Variable departmental costs	22,000	24,000	13,000	59,000
Direct fixed costs	5,000	4,000	3,000	12,000
Allocated fixed costs	6,000	7,000	7,000	20,000
Net income	($2,000)	$ 8,000	$ 3,000	$ 9,000

Demand of individual products is not affected by changes in other product lines. Prepare an incremental analysis to determine if baby dolls should be discontinued.

increased in profits if discontinued

$4,000

Drop in profits if discontinued

($6,000)

Drop in profits if discontinued

($4,000)

Increased in profits if discontinued

$5,000