PART 3 (10 marks) (MLO 1) Dropping and adding new products is an important aspect of business strategy that can have a significant impact on a company's success. The decision can help companies stay competitive, maximize profitability, and meet changing customer needs. Dropping and adding products allows businesses to stay current with changing customer needs and preferences. As markets change and new technologies emerge, companies that can adapt by introducing new products or discontinuing outdated ones can better serve their customers. However, companies must analyze the consequences of their decisions, especially when it comes to dropping existing products. NH Sdn Bhd sells two items, Product A and Product B. Currently, the company is considering dropping Product B. It is expected that sales of product A will increase by 40% as a result. By discontinuing product B, the company will be able to cancel its monthly equipment rental of RM400. The remaining existing equipment will be used to increase the production of product A. If product B production is stopped, one employee earning RM450 per month may be laid off. The fixed costs have been allocated and will remain regardless of the decision. The following is a summarized, budgeted monthly income statement for both products: Required: a) Prepare an incremental analysis to determine the financial effect of dropping product B. (4 marks) b) Based on the analysis in part a, discuss the decision should NH Sdn Bhd made. Justify the rationale of your answer. ( 2 marks) c) When deciding to drop an existing product, it is important to consider both quantitative and qualitative factors. Qualitative factors are particularly important because they can provide insights into the potential impact of dropping a product 3