Members of the board of directors of Security Check 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 580,000 and decrease fixed selling and administrative expenses by $12,000. Read the requirements Data Table Requirement 1. Prepare a differential analysis to show whether Security Check should drop the industrial systems product line. Security Check Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $ 350,000 $ 380,000 $ 740,000 in operating income i Requirements Net Sales Revenue Cost of Goods Sold: Variable 37.000 260.000 Fixed 47,000 63,000 110,000 84.000 323,000 407,000 297,000 1. Prepare a differential analysis to show whether Security Check should drop the industrial systems product line. 2. Prepare contribution margin income statements to show Security Check'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 alteratives' income numbers to your answer to Requirement 1. 3. What have you learned from the comparison in Requirement 2? 63,000 270,000 333,000 Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable 64,000 44,000 Fixed 73,000 26,000 99,000 171,000 $ 137,000 70,000 207,000 126,000 Print Done Total Selling and Administrative Expenses 108,000 (45,000) $ $ Operating Income (Loss) Choose from any list or enter any number in the input fields and then click Check