6. Members of the board of directors of Safety Place have received the following operating income data for the year ended May 31, 2018: Print 11(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 12 Requirement 1. Prepare a differential analysis to show whether Safety Place should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) (1) Expected decrease in revenues 310000 (2) Expected decrease in total variable costs $ 99,000 (3) Expected decrease in fixed costs 279000 (4) Expected decrease in total costs (5) Expected decrease in operating income Requirement 2. Prepare contribution margin income statements to show Safety Place'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. (Use parentheses or a minus sign for an operating loss.) 6. Members of the board of directors of Safety Place have received the following operating income data for the year ended May 31, 2018: Print 11(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 12 Requirement 1. Prepare a differential analysis to show whether Safety Place should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) (1) Expected decrease in revenues 310000 (2) Expected decrease in total variable costs $ 99,000 (3) Expected decrease in fixed costs 279000 (4) Expected decrease in total costs (5) Expected decrease in operating income Requirement 2. Prepare contribution margin income statements to show Safety Place'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. (Use parentheses or a minus sign for an operating loss.)
