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 Pe 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 Office Parade Getaway Polka Pet Store Grocery Total $60,000 $55,000 $21,000 $136,000 27,000 23,000 15,000 65,000 $33,000 $32,000 $6,000 $ 71,000 4.100 13,000 $27,800 $28,300 $1,900 $ 58,000 4,20027,200 $15,800 $17.300 $ (2.300) 30,800 Sales revenue Variable costs Contribution margin Segment margin Net operating income (loss) 5,200 3,700 Less: Direct Fixed costs Less: Common fixed costs 2,000 11,000 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 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 O No 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,500 of the common fixed costs could be avoided if the POP product line were eliminated. Effect on Profit 3-b. Should MSI drop the POP product? O Yes O No