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14 t nce Required information [The following information applies to the questions displayed below] Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market MSI sells both individual 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, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led 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. 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. MSI's information related to the ToddleTown Tours collection follows Segmented Income Statement for MSI's ToddleTown Tours Product Lines Post Office Polka Pet Store Grocery Parade Getaway Total Sales revenue $105,000 $100,000 $30,000 $235,000 Variable costs 45,000 41,000 25,000 111,000 Contribution $ 60,000 $ 59,000 $5,000 $124,000 nargin Less: Direct 7,000 6,400 4,800 18,200 Fixed costs Segment margin $ 53,000 200 $105,800 Less: Common fixed costs 5,250 5,000 1,500 11,758 Net operating $ 47,750 $ 47,600 $(1,300) $ 94,050 income (Loss) $52,600 S "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 items. The remaining fixed overhead currently allocated to the POP product would be redistributed 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? 3-4. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,000 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. Reg 1 Req 2 Req 3A Req 30 Calculate the incremental effect on profit if the POP product is eliminated. Effect on Profit Req 2 >

Required information [The following information applies to the questions displayed below] Morning Sky, Inc. (MS), manufactures and sells computer games. The company has several product lines based on the age range of the target market, MSI sells both individual 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, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led 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 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. MSTS information related to the ToddleTown Tours collection follows: Segmented Income Statement for MSI's ToddleTown Tours Product Lines Post Grocery Office Getaway Polka Total $100,000 $30,000 $235,000 41,000 25,000 111,000 $59,000 $5,000 $124,000 18,200 Pet Store Parade Sales revenue $105,000 Variable costs 45,000 Contribution margin Less: Direct $ 60,000 7,000 Fixed costs Segment margin $53,000 200 $105,800 5,250 5,000 1,500 11,750 Net operating $ 47,750 $ 47,600 $(1,300) $ 94,050 income (loss) Less: Common fixed costs 6,400 4,800 $52,600 $ "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 items. The remaining fixed overhead currently allocated to the POP product would be redistributed 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 $1,000 of the common Exed costs could be avoided if the POP product line were eliminated 3-6. Should MSI drop the POP product? Complete this question by entering your answers in the tabs below. Rec2 Req 3A Req 38 Should MSI drop the POP product? Req 1 Should MSI drop the POP product? < Req1 Req 3A > < Prev "

14 Required information [The following information applies to the questions displayed below] Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual 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, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The gaming market has traditionally been targeted at teenagers and young adults; however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led 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 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. MSI's information related to the ToddleTown Tours collection follows: Segmented Income Statement for MSI's ToddleTown Tours Product Lines Pet Store Parade Post Grocery Office Getaway Polka Total Sales revenue $105,000 $100,000 $30,000 $235,000 Variable costs 45,000 $ 60,000 $ 59,000 $5,000 41,000 25,000 111,000 $124,000 18,200 7,000 6,400 4,800 $ 53,000 $ 52,600 $ 200 $105,800 5,250 5,000 1,500 11,758- Net operating $ 47,750 $ 47,600 $(1,380) $ 94,050 incone (loss) Contribution margin Less: Direct Fixed costs Segment margin Less: Common fixed costs "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 items. The remaining fixed overhead currently allocated to the POP product would be redistributed 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 $1000 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. Req 1 Req 2 Req 3A Req 38 Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,000 of the common fixed costs could be avoided if the POP product line were eliminated. Effect on Profit < Req 2 Req 38 > Show less A

mapter 72 Required information [The following information applies to the questions displayed below] Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual 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, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products The gaming market has traditionally been targeted at teenagers and young adults: however, the increasing affordability of computers and the incorporation of computer activities into junior high and elementary school curriculums has led 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. 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. MSI's information related to the ToddleTown Tours collection follows: Segmented Income Statement for MSI's ToddleTown Tours Product Lines Post Office Pet Store Parade Grocery Getaway Polka Total Sales revenue $105,000 $100,000 $30,000 $235,000 Variable costs 45,000 41,000 25,000 111,000 Contribution margin $ 60,000 $ 59,000 $5,000 $124,000 Less: Direct 7,000 6,400 4,800 18,200 Fixed costs Segment $ 53,000 $52,600 s 200 $105,800 margin Less: Common fixed costs 5,250 5,000 1,500 11,750 Net operating $ 47,750 $ 47,600 $(1,300) $ 94,050 income (loss) "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 items. The remaining fixed overhead currently allocated to the POP product would be redistributed 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 $1,000 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. Req 1 Should MSI drop the POP product? Req 2 Req 3A Req 38 Should MSI drop the POP product? < Req 3A THE Saw