Members of the board of directors of Safety Step 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 $82,000 and decrease fixed selling and administrative expenses by $14,000. Read the requirements. Requirement 1. Prepare a differential analysis to show whether Safety Step should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) in operating income Requirement 2. Prepare contribution margin income statements to show Safety Step'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.) Safety Step Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Totals Without Change if Industrial Industrial Systems Industrial Systems Systems Is Dropped Net Sales Revenuembers of the board of directors of Safety Step have reoeived 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 protable. They commission a study to determine whether the company should drop the line. Company accountants estimate that dropping industrial systems will decrease xed cost of goods sold by $82,000 and decrease xed selling and administrative expenses by $14,000. Read the mulrements. Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss) Requirement 3. What have you learned from the comparison in Requirement 2? The operating income difference calculated on the total analysis of dropping a product line Y the expected decrease in operating income if Safety Step drops the industrial systems product line, as shown in Requirement 1. This demonstrates that the differential analysis approach in Requirement 1 yields V result as the longer approach in Requirement 2 that compares total operating income under the two alternatives. 0 Data Table - X Product Line Industrial Household Systems Systems Total Net Sales Revenue $ 340,000 $ 370,000 $ 710,000 Cost of Goods Sold: Variable 35,000 44,000 79,000 Fixed 250,000 69,000 319,000 Total Cost of Goods Sold 235900 \"3'00\" 398900 Gross Prot 55,000 257,000 312,000 Selling and Administrative Expenses: Variable 66,000 70,000 136,000 Fixed 39,000 28,000 67,000 105,000 98,000 203,000 Total Selling and Administrative Expenses