Top managers of Video Avenue are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following analysis to help make this decision: (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling DVDs. Read the requirements. Data Table Requirement 1. Prepare a differential analysis to show whether Video Avenue should drop the DVD product line. Video Avenue Begin by preparing a differential analysis to show whether Video Avenue should drop the DVDs product line. (Enter decreases to profits with a Expected decrease in revenues-Dropping DVDs Expected decrease in costs-Dropping DVDs Expected in operating Income DVD Discs 129,000 98,000 i Requirements Income Statement For the Year Ended December 31, 2018 Blu-ray Total Discs Net Sales Revenue 437,000 $ 308,000 $ Variable Costs 250,000 154,000 Contribution Margin 187,000 154,000 Fixed Costs: Manufacturing 132,000 76,000 Selling and Administrative 65,000 51,000 Total Fixed Expenses 197,000 127,000 Operating Income (Loss) S (10,000) $ 27,000 $ 33,000 1. Prepare a differential analysis to show whether Video Avenue should drop the DVD product line. 2. Will dropping DVDs add $37,000 to operating income? Explain. 56,000 14,000 70,000 (37,000) Print Done Print Done