3 parts

Members of the board of directors of Security System have received the following operating income data for the year ended May 31, 2024 (Click the icon to view the operating income data) Members of the board are surprised that the industrial systems product line is not profitable. They commission a study to determine whether the company should drop the line. Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $82.000 and decrease fixed selling and administrative expenses by $12.000. Read the requirements CEC Requirement 1. Prepare a differential analysis to show whether Security System should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) Expected decrease in revenues Expected decrease in total variable costs Expected decrease in foxed costs Expected decrease in total costs Expected decrease in operating income $ (310,000) tomar decreases to pr Expected decrease in Expected decrease in Expected decrease in Expected decrease in Expected decrease Data table Net Sales Revenue Cest of Goods Solt Manable Security Systems Income Statement For the Year Ended May 31, 2024 Fixed Total Cost of Goods Sold Gross Prof Seling and Administrative Expenses Variable Find Total Selling and Administrative Expenses Operating Income (Loss) Print $ Product Line Industrial Systems 310,000 $ 39.000 230,000 260.000 41,000 62.000 38,000 100,000 (59.000) Household Systems Done Total 360.000 $ 670.000 49,000 88.000 64,000 204,000 113.000 382.000 247.000 76,000 25.000 101,000 146.000 $ 288,000 138,000 63.000 201.000 87,000 Requirements 1. Prepare a differential analysis to show whether Security System should drop the industrial systems product line. 2. Prepare contribution margin income statements to show Security System'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. 3. What have you learned from the comparison in Requirement 2? Print Done X