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need help asapp Parrine has the product lines in its retail stores, books, DVDs, and musk. Results of the fourth quarter are presented below Revenue
need help asapp
Parrine has the product lines in its retail stores, books, DVDs, and musk. Results of the fourth quarter are presented below Revenue Variable costs Direct fixed costs Common feed costs 10 Net income foss) Books Musis OVDE Total $22,500 $15,000 $10,000 $48,100 12.000 8,000 5,000 25,000 4,000 3,000 3,500 10,500 4.722 3.185 5,038 13.000 S1223 S815 52.93 154003 12 Demand of individual products is not affected by changes in other product lines. Direct fixed costs are costs associated with the specific product line. They will be eliminated if a product line is discontinued. The common fixed costs are allocated based on revenue and will be incurred regardless of how many product lines are carried. Required: a) Prepare an incremental analysis of the effect of dropping the DVDs product line. Should DVDs be dropped? (7 marks) b) Comment on two non-financial factors to be considered by the company in the keep/drop situation. (2 marks) Step by Step Solution
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