E2 b Analyzing Keep or Drop Decision lLo 7-2, 7-5l MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age and includes "tours" of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production. MSIs information related to the ToddleTown Tours collection follows: Segmented Income Statement for MSI's Toddle Town Tours Product Lines Post Pet Store Grocery Office Parade Getaway Polka Total 65,000 60,000 $22,000 147,000 Sales revenue 29,000 25,000 14,000 68,000 Variable costs 36,000 35,000 8,000 79,000 Contribution margin 5,400 4,000 4,200 13,600 Less: Direct Fixed costs 30,600 31,000 3,800 65,400 Segment margin 13,000 12,000 4,400 29,400 Less: Common fixed costs' 17,600 19,000 (600) 36,000 Net operating income (loss) "Allocated based on total sales dollars. MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products. Required eliminated. 1. Calculate the incremental effect on profit if the POP product is on Profit