Required information E7-6 through E7.10. The following information applies to the questions displayed below) Morning Sky, Inc. (MSI, manufactures and sells computer games. The company has several product ines based on the age range of the target market. MSi sells both individus games as well as packaged sets. All games are in CD format and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date. MS has developed and manufactured at the CDs itself as well as the accessories and packaging for all of its products The gaming market has traditionally been targeted of teenagers and young adults, however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculum sed to a significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability rence E7-8 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5) MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is alimed 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 mpressive sales. However, sales for the third CD in the collection, The Post Office Polka, have logged the others. Several other CDs are planned for this collection, but none is ready for production MSI's information related to the ToddleTown Tours collection follows Segmented Income Statement for Tolo Tours Product Lines Pet Pout Store Grocery office Pared Detay Poke mal 375,000 $10.000 524,000 1169,000 30 16.00 A1.00 le revenu Varah Pa 3941 Nax 8 --- Chas ayes who Required information MI considering caminating a product om its loodilown our collection the corections med at renontone year age and includes tours of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, howers ales. However, sales for the third CD in the collection, The Post Office Poks, havenged the othersSeveral others are planned for this collection, but none is ready for production MS information related to the ToddleTown Tours collection follows: Beg Tant to Toddler Product in store Grocery of the PRADE Catan Total Sales teve 515,000 20.00 12, $169,000 Variable sota 23.00 29.00 19.00 11.00 Contribution margi $42.000 943,000 5.000.000 Sess: wirect det 51100 LEGO! 4,50 15,901 Bent margin 536,200 336,600 400$ 79,900 La Common tiedot 2.500 3,000 2,100 16.00 Het optisce loss) 390.00 $28.000 1.55.100 Het 10 lo "Allocated based on total sales revenue MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two torm. The remaining fixed overhead currently located to the POP product would be redistributed to the remaining two products. Required: 1. Calculate the incremental effect on profit of the POP product is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose thot $2.000 of the common fixed costs could be avoided if the POP product line were eliminated 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. QUCL is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated 3.b. Should MSI drop the POP product? ook Complete this question by entering your answers in the tabs below. Print Reg 1 Reg 2 Req 3A Req 38 Calculate the incremental effect on profit if the POP product is eliminated. References Erectan Profit Re Reg 2 > Me Graw Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2.000 of the common feed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? ook Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3A Reg 38 Should MSI drop the POP product? onces Should MSI drop the POP product? 19 pen to the remaining two products Required: 1. Calculate the incremental effect on profit if the POP product is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2.000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Book Complete this question by entering your answers in the tabs below. Print Reg 1 Req 2 Reg DA Reg 38 Calculate the Incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated rences Effect on Profit Should MSi drop the POP product? fed costs could Hint Complete this question by entering your answers in the tabs below. Print Reg 1 Reg 2 Reg 3A Peg 38 Should MSI drop the POP product? rences Should MSI drop the POP product? Required information E7-6 through E7.10. The following information applies to the questions displayed below) Morning Sky, Inc. (MSI, manufactures and sells computer games. The company has several product ines based on the age range of the target market. MSi sells both individus games as well as packaged sets. All games are in CD format and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date. MS has developed and manufactured at the CDs itself as well as the accessories and packaging for all of its products The gaming market has traditionally been targeted of teenagers and young adults, however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculum sed to a significant increase in sales to younger children. MSI has always included games for younger children but now wants to expand its business to capitalize on changes in the industry. The company currently has excess capacity and is investigating several possible ways to improve profitability rence E7-8 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5) MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is alimed 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 mpressive sales. However, sales for the third CD in the collection, The Post Office Polka, have logged the others. Several other CDs are planned for this collection, but none is ready for production MSI's information related to the ToddleTown Tours collection follows Segmented Income Statement for Tolo Tours Product Lines Pet Pout Store Grocery office Pared Detay Poke mal 375,000 $10.000 524,000 1169,000 30 16.00 A1.00 le revenu Varah Pa 3941 Nax 8 --- Chas ayes who Required information MI considering caminating a product om its loodilown our collection the corections med at renontone year age and includes tours of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, howers ales. However, sales for the third CD in the collection, The Post Office Poks, havenged the othersSeveral others are planned for this collection, but none is ready for production MS information related to the ToddleTown Tours collection follows: Beg Tant to Toddler Product in store Grocery of the PRADE Catan Total Sales teve 515,000 20.00 12, $169,000 Variable sota 23.00 29.00 19.00 11.00 Contribution margi $42.000 943,000 5.000.000 Sess: wirect det 51100 LEGO! 4,50 15,901 Bent margin 536,200 336,600 400$ 79,900 La Common tiedot 2.500 3,000 2,100 16.00 Het optisce loss) 390.00 $28.000 1.55.100 Het 10 lo "Allocated based on total sales revenue MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two torm. The remaining fixed overhead currently located to the POP product would be redistributed to the remaining two products. Required: 1. Calculate the incremental effect on profit of the POP product is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose thot $2.000 of the common fixed costs could be avoided if the POP product line were eliminated 3-b. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. QUCL is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated 3.b. Should MSI drop the POP product? ook Complete this question by entering your answers in the tabs below. Print Reg 1 Reg 2 Req 3A Req 38 Calculate the incremental effect on profit if the POP product is eliminated. References Erectan Profit Re Reg 2 > Me Graw Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2.000 of the common feed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? ook Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3A Reg 38 Should MSI drop the POP product? onces Should MSI drop the POP product? 19 pen to the remaining two products Required: 1. Calculate the incremental effect on profit if the POP product is eliminated 2. Should MSI drop the POP product? 3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $2.000 of the common fixed costs could be avoided if the POP product line were eliminated. 3-b. Should MSI drop the POP product? Book Complete this question by entering your answers in the tabs below. Print Reg 1 Req 2 Reg DA Reg 38 Calculate the Incremental effect on profit if the POP product is eliminated. Suppose that $2,000 of the common fixed costs could be avoided if the POP product line were eliminated rences Effect on Profit Should MSi drop the POP product? fed costs could Hint Complete this question by entering your answers in the tabs below. Print Reg 1 Reg 2 Reg 3A Peg 38 Should MSI drop the POP product? rences Should MSI drop the POP product?