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V: Mercer has three product lines in its retail stores: books, videos, and music. Results of the fourth quarter are presented below (21 Puntos): Books

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V: Mercer has three product lines in its retail stores: books, videos, and music. Results of the fourth quarter are presented below (21 Puntos): Books Music Videos Total Units sold 1,000 2,000 2,000 5.000 Revenue $22.000 $40,000 $23,000 $85.000 Variable departmental costs 17,000 22,000 12,000 51.000 Direct fixed costs 1,000 3.000 2.000 6,000 Allocated fixed costs 7.000 7.000 7.000 21.000 Net income (loss) S. (3.000) $ 8.000 $ 2.000 $17.000 The allocated fixed costs are unavoidable. Demand of individual products are not affected by changes in other product lines. Instructions: What will happen to profits if Mercer discontinues the Books product line? V Solucin Music Videos Total $ $ $ Unit Sold Revenue Variable Department Costs Contribution Margin Direct Fixed Costs Allocated fixed Costs Net Income S s $ $ S

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