Members of the board of directers of saftey place have recieved the following operating income data for the year ended may 31, 2018

Members of the board are surprised that the industrial systems product line is not profitable. They commision a study 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 $14,000.

1 A0118 Managerial Do Homewark - mework 13 of 13 (10 complete) the 0 Data Table Company odud selle Safety ises to pr Safety Place Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $ 330,000 $370,000 $ 700.000 Net Sales Revenue Cost of Goods Sold: Variable 35,000 230,000 44,000 69,000 79,000 299,000 265,000 113,000 378,000 Fixed Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable 65,000 257,000 322.000 68,000 45,000 71.000 29,000 139.000 74,000 Fixed 113,000 100,000 213,000 Total Selling and Administrative Expenses Operating Income (Loss) $ (48,000) $ 157,000 $ 109,000 and ti Print Done Clear All fety Place should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to pre Requirements 1. Prepare a differential analysis to show whether Safety Place should drop the industrial systems product line. 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. 3. What have you learned from the comparison in Requirement 2? Print Done Members of the board are surprised that the industrial systems product line is not profitable. They co decrease fixed cost of goods sold by $82,000 and decrease fixed selling and administrative expense Read the requirements Requirement 1. Prepare a differential analysis to show whether Safety Place should drop the indust TI in operating income