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please help. MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age
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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 The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, 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 Income Statement for MSI'S ToddleTown Tour Product Lines Post Pet Store Grocery office Parade Getaway Polka Total Sales revenue $150,000 $145,000 $39,000 $334,000 Variable costs 63,000 59.000 35,000 157.000 Contribution margin $ 87,000 $ 86,000 $ 4,000 $177,000 Less Direct Fixed costs 8,800 9.100 3,700 21,600 Segment margin $ 78,200 $ 76,900 $ 300 $155,400 Lost Common fixed costs. 7,500 7,250 1,950 16,700 Net operating Income (los) $ 70, 700 $ 59,650 S11,650) $138,700 "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: 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? 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. Reg 1 Reg 2 Req 3A Req 3B Calculate the incremental effect on profit if the POP product is eliminated Effect on Profit 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. Reg 1 Reg 2 Req Reg 38 Should MSI drop the POP product? should MSI drop the POP product? 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. Reg Reg 2 Reg JA Req 3B 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 Effect on Profit 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. Reg 1 Reg 2 Reg 3A Req 3B Should MSI drop the POP product? Should MSI drop the POP product Step by Step Solution
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