Members of the board of directors of Safety Point have received the following operating income data for the year ended May $31,2025$:

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 $$82,000$ and decrease fixed selling and administrative expenses by $$15,000.$

Read the requirements.

Requirement $1.$ Prepare a differential analysis to show whether Safety Point 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