Question 2:

(Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling DVDs. Read the requirements. Data table decreases to profits with a parentheses or minus sign.) Requirement 1. Prepare a differential analysis to show whether Sunset Video should drop the DVD product line. Begin by preparing a differential analysis to show whether Sunset Video should drop the DVDs product line. (Enter decreases to profits with a parentheses or minus sign.) Decision: Requirement 2. Will dropping DVDs add $37,000 to operating income? Explain. It is to conclude that dropping the DVD product line would add $37,000 to operating income. If the company drops the DVD product line, it incur fixed expenses allocated to the DVDs