Members of the board of directors of Safety Place have received the following operating income data for the year ended May 31, 2018: (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 $80,000 and decrease fixed selling and administrative expenses by $11,000 Read the requirements Requirement 1. Prepare a differential analysis to show whether Safety Place should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) Expected decrease in revenues Expected decrease in fixed costs Data table Expected decrease in total variable costs Expected decrease in total costs Expected decrease in operating income Safety Place Income Statement For the Year Ended May 31, 2018 Requirements Product Line Industrial Household Systems Systems Total 1. Prepare a differential analysis to show whether Safety Place should drop the industrial systems product line. Net Sales Revenue $ 300,000 $ 390,000 $ 690,000 2. Prepare contribution margin income statements to show Safety Place's total operating income Cost of Goods Sold: 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. Variable 36,000 48,000 84,000 3. What have you learned from the comparison in Requirement 2? Fixed 250,000 66,000 316,000 Total Cost of Goods Sold 286,000 114.000 400,000 Gross Profit 14,000 276,000 290,000 Print Done Selling and Administrative Expenses: Variable 68,000 38,000 71,000 29,000 139,000 67,000 Fixed 106,000 100,000 206,000 Total Selling and Administrative Expenses Operating Income (Loss) $ (92,000) $ 176,000 $ 84,000