bers of the board of directors of 123 Security have received the following operating income data for the year just d: (Click the icon to view the operating income data.) nbers of the board are surprised that the industrial systems product line is losing money. They commission a study to armine whether the company should drop the line. Company accountants estimate that dropping industrial systems decrease fixed cost of goods sold by $79,000 and decrease foxed marketing and administrative expenses by $16,000. Requirements 1 Prepare an incremental analysis to show whether 123 Security should drop the industrial systems product line. 2. Preparo contribution margin income statements to show 123 Security'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? More Info Product Line quirement 1. Prepare an incremental analysis to show whether 123 Security should drop the industrial systems product line. 123 Security Incremental Analysis of Dropping a Product Line Expected decrease in revenues: Dropping industrial systems sales Expected decrease in expenses Variable expenses Cost of goods sold Marketing and administrative expenses Foxed expenses: Cost of goods sold Marketing and administrative expenses Expected decrease in total expenses Industrial Household Systems Systems Total $ 330,000 $ 360,000 $ 690,000 Sales revenue Cost of goods sold Variable $ 36,000 $ 270.000 50,000 $ 68,000 86,000 338.000 Foced 306.000 118,000 424.000 Total cost of goods sold Gross profit. Marketing and administrative expenses Variable 24,000 242,000 266.000 Expected decrease in operating income 62,000 38.000 77,000 25,000 139,000 63,000 Requirement 2. Prepare contribution margin income statements to show 123 Security's total operating income under the two alter alternatives' Income numbers to your answer to Requirement 1. What have you learned from this comparison? the two Fbced Total marketing and administrative expenses Enter any number in the edit fields and then continue to the next question 100,000 (76,000) 102,000 202.000 140,000 $ 64,000 2 Operating income (loss). Members of the board of directors of 123 Security have received the following operating income data for the year just Requirements ended: 1. Prepare an incremental analysis to show whether 123 Security should drop the industrial systems product line. 2. Click the icon to view the operating income data.) Prepare contribution margin income statements to show 123 Security'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 Members of the board are surprised that the industrial systems product line is losing money. They commission a study to alternatives' income numbers to your answer to Requirement 1. What have you learned from this comparison? determine whether the company should drop the line. Company accountants estimate that dropping industrial systems wil decrease fixed cost of goods sold by $79,000 and decrease foved marketing and administrative expenses by $16,000 Requirement 2. Prepare contribution margin income statements to show 123 Security'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? D Begin by preparing the statements with and without the industrial systems line, then prepare the contribution margin income statement showing the decrease if the industrial systems line is dropped. (Use parentheses or a minus sign for an operating loss.) 123 Security Total Analysis of Dropping a Product Line Decreaselt Totals With Totals Without Industrial Systems Industrial Systems Industrial Systems Is Dropped Sales revenue 690000 360000 (330000) Variable expenses: Cost of goods sold (86000) (50000) 36000 Marketing and administrative expense (139000) 77000) 62000 Total variable expenses 223000 232000 Contribution margin 338000 Fixed expenses Cost of goods sold 465000 Enter any number in the edit fields and then continue to the next question MacBook Air Requirements 1. Prepare an incremental analysis to show whether 123 Security should drop the industrial systems product line. 2. Prepare contribution margin income statements to show 123 Security's total operating income under the two alteratives: (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? Members of the board of directors of 123 Security have received the following operating income data for the year just ended: 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 drop the line Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $79.000 and decrease foed marketing and administrative expenses by $16,000. Industrial Systems Industrial Systems Is Dropped Sales revenue 690000 360000 (330000) Variable expenses: Cost of goods sold (86000) (50000) 36000 Marketing and administrative expenso (139000) (77000) 62000 Total variable expenses 465000 223000 232000 Contribution margin 338000 Fbred expenses Cost of goods sold Marketing and administrative expense Total fixed expenses Operating income (loss) What have you learned from this comparison? The operating income difference calculated on the total analysis of dropping a product line the expected decrease in operating income if 123 Security drops the industrial systems product line, as shown in Requirement 1. This demonstrates that the incremental analysis approach in Requirement 1 yields results as the longer approach in Requirement that compares total operating income under the two alternatives Enter any number in the edit fields and then continue to the next question. MacBook Air