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 discontinue the line. Company accountants estimate that discontinuing the industrial systems line will decrease fixed cost of goods sold by $79,000 and decrease fixed marketing and administrative expenses by $12,000. Read the requirements - X Requirement 1. Prepare an incremental analysis to show whether 123 Security should discontinue the industrial systems product line. Incremental Analysis for Discontinuation Decision Total Contribution margin lost if Industrial Systems is discontinued Requirements Less: Fixed cost savings if Industrial Systems is discontinued Operating income if Industrial Systems is discontinued 1. Prepare an incremental analysis to show whether 123 Security should discontinue the industrial systems product line. i Data Table 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 A B | D. from this comparison? 1 123 Security 2 Product Line Contribution Margin Income Statement Print Done 3 For the Year 4 6 Product lines Industrial Household Company Systems Systems Total $ 320,000 $ 360,000 $ 680,000 7 Sales revenue 8 Less cost of goods sold: Variable 9 37,000 40,000 77,000 10 Fixed 260,000 63,000 323,000 11 Gross profit $ 23.000 $ 257,000/ $ 280,000 12 Less marketing and administrative expenses: 13 Variable 63.000 73,000 136,000 14 Fixed 43,000 71,000 28,000 156,000 $ 15 Operating income (loss) $ (83,000) $ 73,000 All Check