Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $ 360,000 $ 380,000 $ 740,000 Net Sales Revenue Cost of Goods Sold: Variable 37,000 260,000 297,000 47,000 63,000 84,000 323,000 Fixed 110,000 407,000 63,000 270,000 333,000 Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable 64,000 44,000 108,000 73,000 26,000 137,000 70,000 Fixed Total Selling and Administrative Expenses 99,000 207,000 Operating Income (Loss) $ (45,000) $ 171,000 $ 126,000 Members of the board of directors of Security Check have received the following operating income data for the year ended May 31, 2018 (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 $80,000 and decrease fixed selling and administrative expenses by $12,000. Read the requirements. Totals With Totals Without Change if Industrial Systems Is Dropped Industrial Systems Industrial Systems 740,000 $ 380,000 $ 137,000 73,000 Net Sales Revenue Variable Costs Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss)