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Please answer all parts. MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years
Please answer all parts.
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 Incorne Statement for MSI's ToddleTown Tours Product Lines $ 38,aa 323, aa 152, aaa $ 84,aa $ 83,aa $ 4,aa 171, aaa $ 75,4aa $ 74,2aa 150, aaa $ 68, Isa $ 67,2aa 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. Pet Store Parade $ 145,aa 61, aaa 8, saa 7,25a Grocery Getaway $ 140,aa 57 , aaa 8, saa 7 , aaa Post Office Polka 34 , aaa 3, saa 4aa 1, saa (-1, sea) Tot a I 21, aaa 16, Isa $ 133,85a 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 $1,200 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 34 Required 3B Calculate the incremental effect on profit if the POP product is eliminated. ect on Profit
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