The following information applies to the questions displayed below Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led toa significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability value 10.00 points Required information MSI is considering eliminating a product from its Toddle Town 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 Toddle Town Tours collection follows: Segmented Income Statement for MSI's Toddle Town Tours Product Lines Post Pet Store Grocery Office e Getaway Polka Total Sales revenue Variable costs S50,000 $45,000 $15,000 $110,000 23,000 19,000 10,000 52000 $27,000 $26,000 S 5,000 $ 58,000 Contribution margin Segment margin Net operating income (loss) Less: Direct Fixed costs 4,800 3.100 3,50011,400 $22,200 $22.900 S 1,500 $ 46,600 Less: Common fixed costs 14 40012.960 4,32031,680 317800 9940 2 820) 3 14920 Allocated based on total sales revenue