$*3$ Steps$*$

View the analysis.

Total fixed costs will not change if the company stops renting movies via vending machines.

Read the requirements.

Requirement $1.$ Prepare a differential analysis to show whether Movie Plus should drop the vending machine product line.

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

Expected decrease in revenues$-$Dropping vending machines

Expected decrease in costs$-$Dropping vending machines

Expected

in operating income

Analysis

Requirements

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

vending machine product line.

Will dropping the vending machine product line add $$39,000$ to

operating income? Explain.