Total fixed costs will not change if the company stops selling DVDs$.$

Read the requirements.

Requirement $1.$ Prepare a differential analysis to show whether Movie Street should drop the DVD product line.

Begin by preparing a differential analysis to show whether Movie Street should drop the DVDs product line. $($Enter decreases to profits with a parentheses or minus sign.$)$

Expected decrease in revenues$$Dropping DVDs

Expected decrease in costs$-$Dropping DVDs

Expected

in operating income

Data table

Requirements

Prepare a differential analysis to show whether Movie Street should drop the

DVD product line.

Will dropping DVDs add $$40,000$ to operating income? Explain.