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Members of the board of directors of Control One have received the following operating income data for the year ended May 31, 2018 B3 (Click
Members of the board of directors of Control One have received the following operating income data for the year ended May 31, 2018 B3 (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 $84,000 and decrease fixed selling and administrative expenses by $15,000 Read the requirements CICI Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Totals Without Change if Industrial Systems Is Dropped Industrial Systems Industrial Systems Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable costs Contribution Margin Foxed Costs Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss) Clear all Check answer Demodocs example Get more help 100% Help me solve this 10 1326 x 561px 6:18 AM 12/13/2021 11 1226 561 x 0 0 38F income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $ 300.000 $ 310,000 $. 610,000 Net Sales Revenue Cost of Goods Sold: Variable 35.000 210.000 42.000 66.000 77,000 276.000 Fixed Total Cost of Goods Sold 245.000 108.000 353,000 Gross Profit 55.000 202.000 257 000 Selling and Administrative Expenses: Variable 66.000 45.000 72 000 21.000 138.000 66,000 Fixed 111,000 93.000 204,000 Total Selling and Administrative Expenses $ (56.000) $ 109.000 $ 53,000 Operating Income (Loss) Requirements 1. Prepare a differential analysis to show whether Control One should drop the industrial systems product line. 2. Prepare contribution margin income statements to show Control One's total operating income under the two alternatives: (a) with the industrial systems line and (b) without the Ine. 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
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