Members of the board of directors of Safety Systems have received the following operating income data for the year just ended: (Click the icon to view the operating income data.) Members of the board are surprised that the industrial systems product line is losing money. They commission a study to determine whether the company should discontinue the line. Company accountants estimate that discontinuing the industrial systems line will decrease fixed cost of goods sold by $81,000 an decrease fixed marketing and administrative expenses by $10,00 Read the requirements Requirement Data Table - Xs product line Contribution A B Less: Fixed d 1 Operating ind Safety Systems Product Line Contribution Margin Income Statement 2 Requirement alternatives: numbers to yo 3 For the Year two fes' income 4 Je statement Begin by pre showing the 6 Product lines Industrial Household Company Systems Systems Total $ 280,000 $ 320,000 $ 600,000 7 Sales revenue 8 Less cost of goods sold: 9 Variable 39.000 72,000 10 Fixed 33,000 200,000 47,000 S 61,000 261,000 $ 220,000 $ 267,000 Sales revenu 11 Gross profit 12 Less marketing and administrative expenses: 13 Variable Variable expo 136.000 71,000 25,000 14 65,000 40,000 (58,000) Fixed 65,000 Choose from $ 15 Operating income (loss) 124,000 $ 66,000 Save for La Print Done Members of the board of directors of Safety Systems have received Company accountants estimate that discontinuing the industrial the following operating income data for the year just ended: systems line will decrease fixed cost of goods sold by $81,000 and (Click the icon to view the operating income data.) decrease fixed marketing and administrative expenses by $10,000. Members of the board are surprised that the industrial systems Read the requirements product line is losing money. They commission a study to determine whether the company should discontinue the line Total Requirement 1. Prepare an incremental analysis to show whether Safety Systems should discontinue the industrial systems product line. Incremental Analysis for Discontinuation Decision Contribution margin lost if Industrial Systems is discontinued 182000 Less: Fixed cost savings if Industrial Systems is discontinued 91000 Operating income gained Wit Industrial Systems is discontinued 91000 Requirement 2. Prepar income statements to show Safety Systems' total operating Income under the two alternatives: (a) with the gained ne and (b) without the line. Compare the difference between the two alternatives' income numbers to your answer lost Nhat have you learned from this comparison? Begin by preparing the statements with and without the industrial systems line, then prepare the contribution margin income statement showing the decrease if the industrial systems line is discontinued. (Use parentheses or a minus sign for an operating loss.) Safety Systems Total Analysis of Discontinuing a Product Line Totals With Industrial Systems 600000 Totals Without Industrial Systems Difference Sales revenue Variable expenses 72000 Requirement 2. Prepare contribution margin income statements to show Safety Systems' 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 this comparison? Begin by preparing the statements with and without the industrial systems line, then prepare the contribution margin income statement showing the decrease if the industrial systems line is discontinued. (Use parentheses or a minus sign for an operating loss.) Safety Systems Total Analysis of Discontinuing a Product Line Difference Totals With Totals Without Industrial Systems Industrial Systems Sales revenue 600000 Variable expenses 72000 Cost of goods sold Marketing and administrative expense 287000 Total variable expenses 138000 Contribution margin Fixed expenses Cost of goods sold Marketing and administrative expense Total foed expenses Operating income (los) What have you learned from this comparison? The operating income difference calculated on the total analysis of discontinuing a product line the expected decrease in operating Choose from any list or enter any number in the input fields and then continue to the next question. Safety Systems Total Analysis of Discontinuing a Product Line Difference Totals With Totals Without Industrial Systems Industrial Systems Sales revenue 600000 Variable expenses Cost of goods sold 72000 Marketing and administrative expense Total variable expenses 267000 Contribution margin 136000 Fixed expenses: Cost of goods sold Marketing and administrative expense Total fixed expenses Operating income (loss) What have you learned from this comparison? The operating income difference calculated on the total analysis of discontinuing a product line income il Safety Systems discontinues the Industrial systems product line, as shown in Require This demonstrates that the incremental analysis approach in Requirement 1 yields compares total operating Income under the two alternativos. the expected decrease in operating does not equal equals roach in Requirement that Choose from any list or enter any number in the input fields and then continue to the next question Save for later Members of the board of directors of Safety Systems have received the Company accountants estimate that discontinuing the industrial syster ollowing operating income data for the year just ended: will decrease fixed cost of goods sold by $81,000 and decrease fixed (Click the icon to view the operating incomo data) marketing and administrative expenses by $10,000 Members of the board are surprised that the industrial systems product line Read the requirements is losing money. They commission a study to determine whether the company should discontinue the line decrease if the industrial systems line is discontinued. (Uso parentheses or a minus sign for an operating loss.) Safety Systems Total Analysis of Discontinuing a Product Line Totals With Totals Without Industrial Systems Industrial Systems Difference Sales revenue 600000 Variable expenses Cost of goods sold 72000 Marketing and administrative expenso 267000 Total variable expenses 138000 Contribution margin Fixed expenses: Cont of goods sold Marketing and administrative expense Total foed expenses Operating income (loss) What have you learned from this comparison? The operating income difference calculated on the total analysis of discontinuing a product line the expected decrease in operating Income il Safety Systems discontinues the industrial systems product line, as shown in Requirement 1. This demonstrates that the incremental analysis approach in Requirement 1 yields results as the longer approach in Requirement that compares total operating income under the two alternatives. different Choose from any list or enter any number in the input fields and then continue Save for Late son the same Members of the board of directors of Safety Systems have received the Company accountants estimate that discontinuing the industrial systems line following operating income data for the year just ended will decrease fixed cost of goods sold by $81,000 and decrease fixed Click the icon to view the operating income data.) marketing and administrative expenses by $10,000 Members of the board are surprised that the industrial systems product line Read the requirements. is losing money. They commission a study to determine whether the company should discontinue the line. Operating income gained Wir Industrial Systems is discontinued 91000 Requirement 2. Prepare contribution margin income statements to show Safety Systems' 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 this comparison? Begin by preparing the stateme tatement showing the decrease if the industrial syster Requirements Total And 1. Prepare an incremental analysis to show whether Safety Systems should discontinue the industrial systems product line. 2. Prepare contribution margin income statements to show Safety Systems' 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 leamed from this comparison? Print Sales revenue Variable expenses: Cost of goods sold Marketing and administrativ Total variable expenses Contribution margin Fixed expenses Done 136000