Members of the board of directors of Security First have received the following operating income data for the year ended May 31, 2024: E (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 decrea fixed cost of goods sold by $83,000 and decrease fixed selling and administrative expenses by $14,000 Data table Requirement 1. Prepare a differential analysis to show whether Security First should drop the industrial systems product line. (Use par $ (310,000) Security First Expected decrease in revenues Expected decrease in total variable costs $ 96,000 Income Statement Expected decrease in fixed costs 97,000 For the Year Ended May 31, 2024 Expected decrease in total costs 193,000 $ (117,000) Expected decrease in operating income Product Line Industrial Household Systems Systems Total $ 310,000 $ 330,000 $ 640,000 Net Sales Revenue Requirement 2. Prepare contribution margin income statements to show Security First's total operating income under the two alternatif income numbers to your answer to Requirement 1. (Use parentheses or a minus sign for an operating loss.) Cost of Goods Sold: Variable 33,000 48,000 68,000 81,000 298,000 Fixed 230,000 263,000 Total Cost of Goods Sold 116,000 379,000 Security First Contribution Margin Income Statement For the Year Ended May 31, 2024 Totals With Totals Without Change if Industrial Industrial Systems Industrial Systems Systems Is Dropped $ 640,000 $ 330,000 $ 310,000 47,000 214,000 261,000 Gross Profit Selling and Administrative Expenses: Net Sales Revenue Variable 140,000 Variable Costs 63,000 45,000 77,000 21,000 Fixed 66,000 Manufacturing 81,000 48,000 33,000 108,000 98,000 Total Selling and Administrative Expenses 206,000 $ (61,000) $ 116,000 $ 55,000 Members of the board of directors of Security First have received the following operating income data for the year ended May 31, 2024 Expected decrease $ (117UUU) in operating income Requirement 2. Prepare contribution margin income statements to show Security First'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.) X Security First Data table Contribution Margin Income Statement For the Year Ended May 31, 2024 Security First Totals With Totals Without Change if Industrial Income Statement Industrial Systems Industrial Systems Systems Is Dropped For the Year Ended May 31, 2024 Net Sales Revenue $ 640,000 $ 330,000 $ 310,000 Product Line Variable Costs Industrial Household Systems Systems Total Manufacturing 81,000 48,000 33,000 140,000 $ 77,000 63,000 Net Sales Revenue Selling and Administrative 310,000 $ 330,000 $ 640,000 Cost of Goods Sold: 221,000 96.000 Total Variable Costs 125,000 Variable 33,000 48,000 81,000 Contribution Margin 419,000 205,000 214,000 Fixed 230,000 68,000 298,000 Fixed Costs 263,000 Total Cost of Goods Sold 116,000 379,000 Manufacturing 298,000 66,000 Gross Profit 47,000 214,000 261,000 Selling and Administrative 364,000 Total Fixed Costs Selling and Administrative Expenses Variable 63,000 77,000 140,000 $ 55,000 Operating Income (Loss) 45,000 21,000 Fixed 66,000 Total Selling and Administrative Expenses 108,000 98,000 206,000 Help me solve this Etext pages Calculator $ (61,000) $ 116,000 $ 55,000 k Operating Income (Loss)
