MSI is considering eliminating a product from its Toddle Town Tours collection. This collection is aimed at children one to three years of age and includes "tours of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production. MSI's information related to the ToddleTown Tours collection follows Segmented Income Statement for MSI's Toddle Town Tours Product Lines Post Pet Store Grocery Office Parade Getaway Polka Sales revenue Variable costs $50,000 $45,000 $15,000 $ 110,000 23,000 9,000 10,000 52,000 $27,000 $26,000 $ 5,000 $ 58,000 3,500 11400 $22,200 $22,900 1,500 $ 46,600 4.320 31,680 Contribution margin Less: Direct Fixed costs 3,100 14.400 2,960 $ 7800 $9.940 Segment margin Less: Common fixed costs* 2820 14920 Net operating income (loss) 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 1. Calculate the incremental effect on profit if the POP product is eliminated. Effect on Profit 2. Should MSI drop the POP product? O Yes 3-a. Calculate the Incremental effect on profit if the POP product is ellminated. Suppose that $3,700 of the common fixed costs could be avolded if the POP product lne were ellminated. Effect on Profit