MSI is considering eliminating a product from its Toddle Town Tours collection. This collection is almed at children one to three yoars 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 Toddle Town Tours Product Lines Post Pet Store Grocery Office Parade Getaway Polka 57.000 53,000 32000 142000 69,800 68,800 600 $139,200 Sales revenue Variable costs $135,000 $130,000 $36,000 $301,000 376,000 77,000 $ 4,000 $159,000 8,200 3,40019,800 Contribution margin Segment margin Net operating income (loss) Less: Direct Fixed costs Less: Common fixed costs 6,750 6,500 1,800 15,050 S 63 1,200) $124,1 Allocated based on total sales dollars. 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 produets Required: 1. Calculate the incremental effect on profit if the POP product is eliminated on 2. Should MSI drop the POP product? Yes No 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suopose thet $1200 of the common fxed costs could be avoided ifthe POP product line were eliminated