Wings Maju sells 3 different sets of child meals in its restaurants: M1, M2, and M3. Changes in product lines do not affect demand of other products. Results of July are below:

	M1	M2	M3	Total
Units sold	4,000	2,500	2,600	9,100
Revenue	$32,000	$30,000	$26,000	$88,000
Variable departmental costs	19,200	16,500	10,400	46,100
Direct fixed costs	5,000	7,000	4,000	16,000
Allocated fixed costs	6,500	8,500	7,500	22,500
Net income	$1,300	($2,000)	$4,100	$3,400

Seventy percent of the allocated fixed costs are unavoidable.

Required:

a.	Prepare an incremental analysis to determine if M2 should be discontinued.
	(15 marks)
b.	Briefly explain costs allocation death spiral effect.
	(5 marks)
c.	Define opportunity costs and give an example / situation on when opportunity costs exist.
	(5 marks)