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 proftable. 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 $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 total variable costs Expected decrease in fixed costs Expected decrease in total costs Expected decrease in operating income Data Table Safety Place Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total Net Sales Revenue S 340,000 $ 370,000 $ 710,000 Cost of Goods Sold: Variable 40,000 230,000 270,000 70,000 49,000 89,000 66,000 296,000 115,000 385,000 255,000 325,000 Fixed Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable 75,000 138,000 21,000 64,000 96,000 202,000 S (36,000) $159,000 $ 123,000 63,000 43,000 106,000 Fixed Total Selling and Administrative Expenses Operating Income (Loss) Print Done Requirements 1. Prepare a differential analysis to show whether Safety Place should drop the industrial systems product line. Prepare contribution margin income statements to show Safety Place'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 the comparison in Requirement 2? 2. 3. Print Done Cost of Goods Sold Variable 40,000 49,000 89,000