1.	Prepare an incremental analysis to show whether Security FirstSecurity First should discontinue the industrial systems product line.
2.	Prepare contribution margin income statements to show Security First's total operating income under the two alternatives: (a) with the industrial systems line and (b) without the line. Compare the difference between the two alternatives' income numbers to your answer to Requirement 1. What have you learned from this comparison?

Company accountants estimate that discontinuing the industrial systems line will decrease fixed cost of goods sold by $82,000 and decrease fixed marketing and administrative expenses by $14,000. Members of the board of directors of Security First have received the following operating income data for the year just ended: B(Click the icon to view the operating income data.) Members of the board are surprised that the industrial systems product line is losing money. They commission a study to determine whether the company should discontinue the line. Read the requirements. i Data Table Requirement 1. Prepare an incremental analysis to show whether Security First should discontinue the industrial systems product line. Total Incremental Analysis for Discontinuation Decision Contribution margin lost if Industrial Systems is discontinued Less: Fixed cost savings if Industrial Systems is discontinued Security First Product Line Contribution Margin Income Statement For the Year Operating income if Industrial Systems is discontinued Product lines Industrial Household Company Systems Systems Total 320,000 $ 370,000 $ 690,000 Sales revenue $ Less cost of goods sold: Variable 38,000 270,000 39,000 67,000 77,000 337,000 Fixed Gross profit 12,000 $ 264,000 $ 276,000 Less marketing and administrative expenses: Variable Fixed 62,000 42,000 (92,000) $ 74,000 25,000 165,000 $ 136,000 67,000 73,000 Operating income (loss) $ Choose from any list or enter any number in the input fields and then click Check Answer. Print Done 3 parts 3 partaining - Clear All