What is the decision? Drop DVD's or Do Not Drop DVD's?

Top managers of Video Street are alarmed by their operating losses. They are considering dropping the DVD product line. Company accountants have prepared the following analysis to help make this decision: (Click the icon to view the analysis.) Assume that Video Street can avoid $52,000 of fixed costs by dropping the DVD product line (these costs are direct fixed costs of the DVD product line). Prepare a differential analysis to show whether Video Street should stop selling DVDs. (Enter decreases to revenues with a parentheses or minus sign.) $ (121,000) Expected decrease in revenues Expected decrease in costs: Variable costs $ 99,000 52,000 Fixed costs Expected decrease in total costs 151,000 30,000 $ Expected increase in operating income Decision: Drop DVDs Do not drop DVDs Video Street Income Statement For the Year Ended December 31, 2024 Net Sales Revenue $ Total Blu-ray Discs DVD Discs 430,000 $ 309,000 $ 121,000 248,000 149,000 99,650 Variable Costs Contribution Margin 182,000 160,000 22,000 Fixed Costs: Manufacturing 124,000 66,000 69,000 49,000 55,000 17,000 Selling and Administrative Total Fixed Costs 190,000 118,000 72,000 $ Operating Income (Loss) (8,000) $ 42,000 $ (50,000) p managers of Video Street are alarmed by their operating losses. They ar e. Company accountants have prepared the following analysis to help mak (Click the icon to view the analysis.) $ (121 Expected decrease in revenues Expected decrease in costs: Variable costs $ 99,000 Fixed costs 52,000 151 Expected decrease in total costs $ 30 Expected increase in operating income ecision: Drop DVDs Do not drop DVDs