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 Toddle Town Tours collection follows: Segmented Income Statement for MSI's ToddleTown Tours Product Lines Post Pet Store Grocery Office Parade Getaway Polka Total Sales revenue Variable costs $50,000 S45,000 $15,000 S110,000 23,000 9,000 10,000 52,000 Contribution margin Less: Direct Fixed costs S26,000 4,800 $22,200 S22,900 1,500 S 46,800 14,400 ,960 ,320 31,680 Segment margin Less: Common fixed costs $ 7.800 S 9,940 $(2,820 S 14,920 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 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $3,700 of the common fixed costs could be avoided if the POP product line were eliminated. Effect on Profit