Mohave Corp. is considering eliminating a product from its Sand Trap line of beach umbrellas. This collection is aimed at people who spend time on the beach or have an outdoor patio near the beach. Two products, the Indigo and Verde umbrellas, have impressive sales. However, sales for the Azul model have been dismal. Mohave's information related to the Sand Trap line is shown below. Segmented Income Statement for Mohave's Sand Trap Beach Umbrella Products Indigo Verde Azul Total Sales revenue $60,000 $60,000 $30,000 $150,000 Variable costs 34,000 31,000 26,000 91,000 Contribution margin $26,000 $29,000 $ 4,000 $59,000 Less: Direct fixed costs 1,900 2,500 2,000 5,400 Segment margin $24,100 $20, 500 $2,000 $52,600 Common fixed costs 17,840 8,920 44,600 Net operating income (loss) $8,000 $(6,920) $ 8,000 Allocated based on total sales revenue 17,840 $6,260 Mohave has determined that eliminating the Azul model would cause sales of the Indigo and Verde models to increase by 10 percent and 15 percent, respectively. Variable costs for these two models would increase proportionately. Although the direct fixed costs could be eliminated, the common fixed costs are unavoidable. The common fixed costs would be redistributed to the remaining two products ces Segment margin Common fixed costs Net operating income (loss) Allocated based on total sales revenue $24,100 17,840 $26,500 $2,000 17,840 $52,600 8,920 44,600 $(6,920) $ 8,000 $ 6,260 $8,660 Mohave has determined that eliminating the Azul model would cause sales of the Indigo and Verde models to increase by 10 percent and 15 percent, respectively. Variable costs for these two models would increase proportionately. Although the direct fixed costs could be eliminated, the common fixed costs are unavoidable. The common fixed costs would be redistributed to the remaining two products. Required: 1-a. Complete the table given below, assuming Mohave Corp. drops the Azul line. 1-b. Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? 2. Should Mohave drop the Azul model? 3-a. Complete the table given below assuming that Mohave had no direct fixed overhead in its production information and the entire $51,000 of fixed cost was common fixed cost. 3-b. Should Mohave drop the Azul model? 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req LA Req 18 Reg 2 Reg 3A Req 38 Reg C 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req LA Req 18 Req 2 Req 3A Req 38 Req 3C Complete the table given below, assuming Mohave Corp. drops the Azul line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.) Sales Revenue Vanable Costs Contribution Margin Direct Fixed Costs Segment Margin Common Fixed Costs Net Operating Income (Loss) Indigo Verde Total Req 18 > 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req LA Req 15 Req 2 Req 3A Req 35 Rug C Will Mohave's net operating income increase or decrease if the Azul model is eliminated? By how much? Change in Net Operating Income (Loss) 3-b. Should Mohave drop the Azul model? 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 3A Req 38 Req 3C Should Mohave drop the Azul model? OYes nces ONO 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req LA Req 15 Req 2 Req 3A Req 38 Req 3C Complete the table given below assuming that Mohave had no direct fixed overhead in its production information and the entire $51,000 of foxed cost was common fixed cost. Contribution Margin Gained on Indigo Contribution Margin Gained on Verde Contribution Margin Lost on Arul Net Increase in Contribution Margin Change in Foxed Costs Net Change in Profit if Azul is Eliminated Change in Contribution Margin 3-b. Should Mohave drop the Azul model? 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 3A Req 38 Req 3C Should Mohave drop the Azul model? OYes ONO 3-c. What is the increase or decrease in the net operating income of Mohave? Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 3A Req 38 Req 3C What is the increase or decrease in the net operating income of Mohave? Change in Net Operating Income (Loss) ces