Members of the board of directors of Safety First 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 $84,000 and decrease fixed marketing and administrative expenses by $12,000. Requirements 1. Prepare an incremental analysis to show whether Safety First should drop the industrial systems product line 2. Prepare contribution margin income statements to show Safety First's total operating income under the wo 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? 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 Enter any number in the edit fields and then continue to the next question. 5.CENA Members of the board of directors of Safety First have received the following operating income data for the year Requirements just ended 1. Prepare an incremental analysis to show whether Safety First should drop the industrial systems product line (Click the icon to view the operating income data.) 2. Prepare contribution margin income statements to show Safety First's total operating income under the two Members of the board are surprised that the industrial systems product line is losing money. They commission a 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 leamed from this 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 marketing and comparison? administrative expenses by $12,000. Requirement 2. Prepare contribution margin income statements to show Safety First'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.) Safety First Total Analysis of Dropping a Product Line Decrease If Totals With Totals Without Industrial Systems Is Dropped Industrial Systems Industrial Systems Sales revenue Variable expenses Enter any number in the edit fields and then continue to the next question -X More Info Members of the board of directors of Safety First 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 $84,000 and decrease fixed marketing and administrative expenses by $12,000. Product Line Industrial Household Systems Systems Total $ 340,000 $ 390.000 $ 730,000 Sales revenue Sales revenue Variable expenses Cost of goods sold Variable $ 42,000 $ Cost of goods sold Marketing and administrative expense 36,000 $ 290,000 78.000 358,000 68,000 Fixed Total variable expenses 326.000 110.000 436.000 Contribution margin Total cost of goods sold Gross profit Marketing and administrative expenses 14,000 280.000 294,000 Fixed expenses Cost of goods sold Variable 144.000 65,000 38,000 79,000 27,000 Marketing and administrative expense 65.000 Fixed Total fixed expenses Total marketing and Enter any number in the edit fields and then continue to the next question Print Done Alved the following operating income data for the year just ended: i (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 $84,000 and decrease fixed marketing and administrative expenses by $12,000. Requirements 1. Prepare an incremental analysis to show whether Safety First should drop the industrial systems 2. Prepare contribution margin income statements to show Safety First's total operating income unde alternatives: (a) with the industrial systems line and (b) without the line. Compare the difference be two alternatives' income numbers to your answer to Requirement 1. What have you learned from comparison? Fixed expenses Cost of goods sold Marketing and administrative expense Total fixed expenses Operating income (loss) What have you learned from this comparison? The operating income difference calculated on the total analysis of dropping a product line Requirement 1 the expected decrease in operating income if Safety First drops the industrial systems product line, as shown in This demonstrates that the incremental analysis approach in Requirement 1 yields V results as the longer approach in Requirement 2 that compares total operating income under the two alternatives. Enter any number in the edit fields and then continue to the next