Members of the board of directors of Adobe Security have received the following operating income data for the year just Requirements ended: 1. Prepare an incremental analysis to show whether Adobe Security should drop the industrial systems product line. i (Click the icon to view the operating Income data.) 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 Members of the board are surprised that the industrial systems product line is losing money. They commission a study to alternatives' income numbers to your answer to Requirement 1. What have you learned from this comparison? 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 marketing and administrative expenses by $9,000 Requirement 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? Begin by preparing the statements with and without the industrial systems line, then prepare the contribution margin income statement showing the decrease if the industrial systems line is dropped. (Use parentheses or a minus sign for an operating loss.) More Info Adobe Security Total Analysis of Dropping a Product Line Product Line Totals With Totals Without Industrial Systems Decrease if Industrial Systems Is Dropped Industrial Household Industrial Systems Sales revenue Systems Systems Total $ 390,000 $ 400,000 $ 790,000 Sales revenue.... Variable expenses: Cost of goods sold: Cost of goods sold Marketing and administrative expense Variable $ 41,000 $ 260,000 48,000 $ 69,000 89,000 329,000 Fixed Total variable expenses 301,000 117,000 418,000 89.000 283,000 372.000 Contribution margin Fixed expenses: Cost of goods sold Total cost of goods sold Gross profit.. Marketing and administrative expenses: Variable 66,000 45,000 78,000 27,000 144.000 72,000 Enter any number in the edit fields and then continue to the next question, Fixed Total marketing and administrative expenses 111,000 105,000 216,000 MacBook Air