Question list K make this decision. (Click the icon t - X Total fixed costs will no Analysis O Question 1 Requirements Total Blu-ray Discs DVDs O Question 2 Sales revenue . $ 435,000 $ 303,000 $ 132,000 Requirement 1. Prepa 239,000 151,000 88,000 bing DVDs add to operating income? Explain. (Use parentheses or a minus sign to enter Variable expenses 196,000 152,000 44,000 O Question 3 Contribution margin . . . . . . . . Fixed expenses: Manufacturing . . . . . . . . .. . 124,000 75,000 49,000 O Question 4 Expected decrease Marketing and administrative 85,000 54,000 31,000 Expected decrease 209,000 129,000 80,000 Total fixed expenses Variable expens O Question 5 $ (13,000) $ 23,000 $ 36,000) Fixed expenses Operating income (loss) . . . ... Total expected O Question 6 Expected increase Print Done Decision: re drops the DVD product line, it incur $ in fixed O Question 7 expenses allocated to Requirement 2. Assume that Videos and More can avoid $31,000 of fixed expenses by dropping the DVD product line. (These costs are direct fixed costs of the DVD product line.) Prepare anTop managers of Videos 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 Question list K make this decision. (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling DVDs. O Question 1 Requirement 2. Assume that Videos and More can avoid $31,000 of fixed expenses by dropping the DVD product line. (These costs are direct fixed costs of the DVD product line.) Prepare an O Question 2 incremental analysis to show whether Videos and More should stop selling DVDs. (Use parentheses or a minus sign to enter a decrease in operating income.) Videos and More Analysis of Dropping the DVD Product Line O Question 3 Expected decrease in revenues Expected decrease in expenses: O Question 4 Variable expenses Fixed expenses O Question 5 Total expected decrease in expenses Expected increase (decrease) in operating income O Question 6 Decision: because the product's incremental revenues its incremental costs. Requirement 3. Now, assume that $72,000 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 6%. What O Question 7 should the company do? Prepare an incremental analysis. (Use parentheses or a minus sign to enter a decrease in operating income.)Top managers of Videos 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 Question list K O Question 1 Decision: because the product's incremental revenues its incremental costs. Requirement 3. Now, assume that $72,000 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 6%. What O Question 2 should the company do? Prepare an incremental analysis. (Use parentheses or a minus sign to enter a decrease in operating income.) O Question 3 Videos and More Analysis of Dropping the DVD Product Line Expected decrease in revenues O Question 4 Expected decrease in expenses: Variable expenses O Question 5 Fixed expenses Total expected decrease in expenses Expected increase (decrease) in operating income O Question 6 Lost contribution margin on Blu-ray discs Net expected increase (decrease) in operating income O Question 7 Decision: Videos and More should consider This would let Videos and More its operating income.Top managers of Videos 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 Question list K make this decision. (Click the icon to X Total fixed costs will nd Analysis O Question 1 Require - X Requirements O Question 2 Require 1. Prepare an incremental analysis to show whether Videos and More should drop the DVD product line. Will d to operating income? Explain. (Use parentheses or a minus dropping DVDs add to operating income? Explain. O Question 3 2. Assume that Videos and More can avoid $31,000 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 Videos and More should stop selling DVDs. 3. Now, assume that $72,000 of fixed costs assigned to DVDs are direct fixed costs and can be avoided if the O Question 4 Exped 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 Exped production and sales would decline 6%. What should the company do? Va O Question 5 Fix To Print Done O Question 6 Exped Decision: pre drops the DVD product line, it incur $ in fixed O Question 7 expenses allocated to Requirement 2. Assume that Videos and More can avoid $31,000 of fixed expenses by dropping the DVD product line. (These costs are direct fixed costs of the DVD product line.) Prepare anTop managers of Videos 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 Question list K make this decision. (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling DVDs. O Question 1 O Question 2 Requirement 1. Prepare an incremental analysis to show whether Videos 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.) Videos and More O Question 3 Analysis of Dropping the DVD Product Line Expected decrease in revenues O Question 4 Expected decrease in expenses: Variable expenses Fixed expenses O Question 5 Total expected decrease in expenses Expected increase (decrease) in operating income O Question 6 Decision: DVDs. It is to conclude that dropping DVDs would add to operating income. If Videos and More drops the DVD product line, it incur $ in fixed expenses allocated to DVDs. O Question 7 Requirement 2. Assume that Videos and More can avoid $31,000 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 Videos and More should stop selling DVDs. (Use parentheses or a minus sign to enter a decrease in operating income.)