Members of the board of directors of Safety Step have received the following operating income data for the year ended May 31, 2018: BE: (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 $11,000. 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.) $ (310,000) Expected decrease in revenues Expected decrease in total variable costs $ 99,000 Expected decrease in fixed costs 93,000 Expected decrease in total costs 192,000 Expected decrease in operating income $ (118,000) 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 Industrial Systems Industrial Systems Change if Industrial Systems Is Dropped Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss) Safety Step Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $ 310,000 $ 370,000 $ 680,000 Net Sales Revenue Cost of Goods Sold: Variable 33,000 230,000 48,000 68,000 81,000 298,000 Fixed Total Cost of Goods Sold 263,000 116,000 379,000 Gross Profit 47,000 254,000 301,000 Selling and Administrative Expenses: Variable 66,000 72,000 29,000 138,000 67,000 Fixed 38,000 Total Selling and Administrative Expenses 104,000 101,000 205,000 (57,000) $ $ Operating Income (Loss) 153,000 $ 96,000