Slick Foods has three product lines. Demand of individual products is not affected by changes in other product lines. 50% of the fixed costs for each product line are direct and cannot be avoided, and the other 50% are allocated to other products. Results follow:

	Product 1	Product 2	Product 3	Total
Units sold	2,000	500	400	2,900
Revenue	$10,000	$20,000	$10,000	$40,000
Variable departmental costs	6,000	13,000	4,200	23,200
Fixed costs	5,000	2,000	3,000	10,000
Net income (loss)	$ (1,000)	$ 5,000	$ 2,800	$6,800

a) Prepare an incremental analysis of the effect of dropping product 1. b.

a) Please provide your recommendation to Slick Foods CFO and provide him with your reasons for the recommendation.