Members of the board of directors of Security One have received the tollowing operating income data for the yearjust Company accountants estimate that discontinuing the industrial systems line will decrease fixed cost of goods sold by ended S84,000 and decrease fixed marketing and administrative expenses by $15,000 Read the requirements. EEB (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 commisslon a study to determine whether the company should discontinue the line. Requirement 1. Prepare an incremental analysis to show whether Security One should discontinue the industial systems product line Incremental Analysis for Discontinuation Decision Total if Industrial Systems is Contribution margin lost if Industrial Systems is discontinued Less: Fixed cost savings if Industrial Systems is discontinued Operating income if Industrial Systems is discontinued Product Line Contribution Margin Income Statement Requirements For the Year Product lines Industrial Household Company Systems Systems 1. Prepare an incremental analysis to show whether Security One should discontinue the industrial systems product line Total 2. Prepare contribution margin income statements to show Security One's total Sales revenue $ 320,000 $380,000 $ 700,000 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? Less cost of goods sold Variable 47,000 61,000 40,000 270,000 87,000 331,000 Fixed Gross proft Less marketing and administrative expenses: $ 10,000 $ 272,000 $ 282,000 Print Done Variable 72,000 140,000 60,000 $ (98,000)$80,000 $ 82,000 68,000 40,000 20,000 Fixed Operating income (loss)