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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

image text in transcribedMembers 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

$81,000

and decrease fixed selling and administrative expenses by

$10,000.

image text in transcribed

1, 2016: (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 $81,000 and decrease fixed selling and administrative expenses by $10,000 Read the requirements Requirement 1. Prepare a differential analysis to show whether Security Check should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) Requirements in operating income 1. Prepare a differential analysis to show whether Security Check should drop the industrial systems product line. 2. Prepare contribution margin income statements to show Security Check's total operating income under the two alternatives: (a) with the industrial systems line and (b) ithout the line. Compare the difforence between the two altematives' income numbers to your answer to Requirement 1. What have you learned from the comparison in Requirement 2? 3. Print Done

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