Parino Company has three product lines in it retail stores: books, videos, and music. The allocated fixed costs are based on units sold and are unavoidable. Demand of individual products is not affected by changes in order product lines. Results of the fourth quarter are presented below:

Units sold: Books: 1,000 Music: 2,000 Video: 2,000 Total: 5,000

Revenue: Books: $24,000 Music; $48,000 Video: $30,000 Total: $102,000

Variable departmental cost: Books: 15,000 Music: 22,000 Video: 23,000 Total: 60,000

Direct fixed costs: Books: 3,000 Music: 6,000 Video: 4,000 total: 13,000

Allocated fixed costs: Books 4,400 Music: 8,800 Video:8,800 Total: 22,000

Net Income(loss): Books: $1,600 Music:$11,200 Video: $(5,800) Total: $7,000

A. Prepare an incremental analysis of the effect of dropping the Video product line.

B. Should Parino Eliminate the Video? Briefly indicate why or why not?