Members of the board of directors of Safe Zone have received the following operating income data for the year ended May 31, 2018: B (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 $81,000 and decrease fixed selling and administrative expenses by $15,000. Read the requirements. Requirement 1. Prepare a differential analysis to show whether Safe Zone should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) Expected decrease in revenues $ (340,000) Expected decrease in total variable costs $ 101,000 96,000 Expected decrease in fixed costs Expected decrease in total costs 197,000 Expected decrease in operating income $ (143,000) Requirement 2. Prepare contribution margin income statements to show Safe Zone'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. Use parentheses or a minus sign for an operating loss.) Safe Zone Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Totals Without Industrial Systems Industrial Systems 700,000| Change if Industrial Systems Is Dropped Net Sales Revenue Variable Costs: Manufacturing 83,000 Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss) Safe Zone Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total 340,000 $ 360,000 $ 700,000 Net Sales Revenue $ Cost of Goods Sold: Variable 35,000 240,000 48,000 68,000 83,000 308,000 Fixed Total Cost of Goods Sold 275,000 116,000 391,000 Gross Profit 65,000 244,000 309,000 Selling and Administrative Expenses: Variable 66,000 45,000 Fixed 71,000 29,000 100,000 144,000 $ 137,000 74,000 211,000 98,000 Total Selling and Administrative Expenses 111,000 (46,000) $ $ Operating Income (Loss)