QUESTION 7 Parino Company has three product lines in its retail stores, books, music, and videos. The allocated fixed costs are based on units old and are unavoidable Demand ot Individual products is not affected by changes in other product lines. Results of the fourth quarter are presented below Books Music Videos Total Units sold 1,000 2.000 2.000 5,000 Revenue $24,000 $48,000 $32,000 $104,000 Variable departmental costs 15,000 22,000 23,000 60.000 Avoidable fixed costs 3,000 6.000 4.000 13,000 Unavoidable fixed costs 4.400 8.800 8.800 22.000 Net Income (loss) $ 1.600 $11.200 $.(3.800) 5.9.000 Required: a. Prepare an incremental analysis of the effect of dropping the Video product line. (15 points) b. Prepare a condensed income statement using the CVP format for Parino Company, assuming the Video Division is eliminated. (10 points) Artal 3 (12pt) T Bi Words: 0