Members of the board of directors of Adobe 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 $85,000 and decrease fixed marketing and administrative expenses by $14,000. Requirements 1. Prepare an incremental analysis to show whether Adobe Security should drop the industrial systems product line. 2. Prepare contribution margin income statements to show Adobe 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? Requirement 1. Prepare an incremental analysis to show whether Adobe Security should drop the industrial systems product line. Adobe 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 Fixed expenses: Cost of goods sold Marketing and administrative expenses Expected decrease in total expenses Expected decrease in operating income Product Line Industrial Household Systems Systems Total $ 310,000 $ 370,000 $ 680,000 Sales revenue Cost of goods sold: Variable $ 35,000 $ 50,000 $ 64,000 85,000 304,000 Fixed 240,000 275,000 114,000 389,000 Total cost of goods sold Gross.profit .. Marketing and administrative expenses: 35,000 256,000 291,000 Variable 69,000 42,000 74,000 30,000 143,000 72,000 Fixed Total marketing and administrative expenses 111,000 104,000 215,000 $ (76,000) $ 152,000 $ 76,000 Operating income (loss)