Please help me to answer 3 requirements in the below question.

Top managers of Movies and More are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following analysis to help make this decision. (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling DVDs. Requirements Requirement 1. Prepare an incremental analysis to show whether Movies and More should drop the DVD product line. Will dropping DVDs add to operating income? Explain. (Use parentheses or a minus sign to enter a decrease in operating income. Movies and More i Analysis - X Analysis of Dropping the DVD Product Line Expected decrease in revenues 115000 Expected decrease in expenses: Blu-ray Variable expenses 76000 Total Discs DVDs Fixed expenses 0 Sales revenue. . . $ 418,000 $ 303,000 $ 115,000 Total expected decrease in expenses 76000 Variable expenses 231,000 155,000 76,000 Expected increase (decrease) in operating income 39000 Contribution margin 187,000 148,000 39,000 Fixed expenses: Manufacturing 76,000 59,000 i Requirements - X 135,000 Marketing and administrative 79,000 53,000 26,000 Total fixed expenses 214,000 129,000 85,000 1. Prepare an incremental analysis to show whether Movies and More should drop the DVD product line. Will Operating income (loss) . . . . . . . . . . (27,000) $ 19,000 $ (46,000) dropping DVDs add to operating income? Explain. 2. Assume that Movies and More can avoid $26,000 of fixed expenses by dropping the DVD product line. (These costs are direct fixed costs of the DVD product line.) Prepare an incremental analysis to show whether Movies and More should stop selling DVDs. Print Done 3. Now, assume that all $85,000 of fixed costs assigned to DVDs are direct fixed costs and can be avoided if the company stops selling DVDs. However, marketing has concluded that Blu-ray disc sales would be adversely affected by discontinuing the DVD line. (Retailers want to buy both from the same supplier.) Blu-ray disc production and sales would decline 10%. What should the company do? Print Done