MSI's information related to the ToddleTown Tours collection follows:

$*$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:

Calculate the incremental effect on profit if the POP product is eliminated.

Should MSI drop the POP product?

$3-$a$.$ Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $$1,000$ of the common fixed costs could be avoided if the POP product line were eliminated.

$3-$b$.$ Should MSI drop the POP product?

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