MSI is considering eliminating a product from its ToddleTown 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 Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, Post Office Polka (POP), 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: Sales revenue margin Less: Direct Fixed costs. Variable costs Contribution Segment margin Less: Common fixed costs Net operating income (loss) Segmented Income Statement for MSI's ToddleTown Tours Product Lines Pet Store Parade $ 90,000 39,000 $ 51,000 6,400 $44,600 9,000 Grocery Getaway $ 85,000 35,000 $ 50,000 5,500 $ 44,500 8,500 Post Office Polka $ 27,000 22,000 $ 5,000 4,500. $ 500 2,700 $ 35,600 $ 36,000 $ (-2,200) Total $ 202,000 96,000 $ 106,000 16,400 $ 89,600 20,200 $ 69,400 "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. 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 38 Calculate the incremental effect on profit if the POP product is eliminated. Effect on Profit MSI is considering eliminating a product from its ToddleTown 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 Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, Post Office Polka (POP), 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 ToddleTown Tours Product Lines Pet Store Parade $ 90,000 39,000 $51,000 6,400 $ 44,600 9,000 Polka $27,000 Grocery Getaway $ 85,000 35,000 $ 50,000 5,500 Post Office $ 44,500 8,500 $ 35,600 $ 36,000 22,000 $ 5,000 4,500 $ 500 2,700 $ (-2,200) Total $ 202,000 96,000 $ 105,000 16,400 $ 89,600 20,200 $ 69,400 Sales revenue Variable costs Contribution margin Less: Direct Fixed costs Segment margin- Less: Common fixed costs 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. 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 3B Should MSI drop the POP product? Should MSI drop the POP product? MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is almed at children one to three years of age and includes "tours" of a hypothetical town. Two products. The Pet Store Parade and Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, Post Office Polka (POP), 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 ToddleTown Tours Product Lines i Pet Store Parade $ 90,000 39,000 $51,000 6,400 $ 44,600 9,000 Grocery Getaway $ 85,000 35,000 $ 50,000 5,500 $ 44,500 8,500 Sales revenue Variable costs Contribution margin Less: Direct Fixed costs Segment margin Less: Connon fixed costs Net operating income (loss) 'Allocated based on total sales revenue. Post Office Polka $27,000 22,000 $5,000 4,500 $ 500 2,700 $ 35,600 $ 36,000 $ (-2,200) Total $ 202,000 96,000 $106,000 16,400 $ 89,600 20,200 $ 69,400 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. 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs Could be avoided if the POP product line were eliminated. B-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 38 Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated. ffect on Profit MSI is considering eliminating a product from its ToddleTown 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 Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, Post Office Polka (POP), 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: Sales revenue margin Less: Direct Fixed costs Segmented Income Statement for MSI's ToddleTown Tours Product Lines Pet Store Parade $ 90,000 39,000 $ 51,000 6,400 $ 44,600 9,000 Total Grocery Getaway $ 85,000 35,000 Post Office Polka $ 202,000 96,000 $ 50,000 5,500 $ 44,500 8,500 $ 35,600 $ 36,000 $ 27,000 22,000 $ 5,000 4,500 $ 500 2,700 $ (-2,200) $ 106,000 16,400 $ 89,600 20,200 $ 69,400 Variable costs Contribution Segment margin Less: Common fixed costs 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. 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3A Required 38 Should MSI drop the POP product? Should MSI drop the POP product?