Members of the board of directors of Security System have received the following operating income data for the year ended May 31, 2024:

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 $81,000 and decrease fixed selling and administrative expenses by $10,000.

Requirements 1. Prepare a dferental anclysa to show whether Secunty System should drop the industrial ontems product ine 2. Prepare contbuton margin income statements to show Securify Syliem's betal operasing Compare the diflereace bolween be foro alsematver' inocme numbers to your answer to Aequerement 1. 3. What heve you leamed bem Be comparison in Hequirement 2y In operaing income line. Compare the difference between the two alternatives' income numbers to your antwer to Requirement 1 . (Whe parentheses or a minus sign for an eperating lose) For the Yoar Ended May 31, 2024 Totals With Totals Without Change if Industrial Industrial Systems Industrial Systems Systems is Dropped Not Sales Revenue Variable Costs: Manufacturing Selling and Administratwo Total Variablo Costs Contribution Margin Flowed Costs: Manutacturing Solling and Administrative Total Food Costs Operating Income (Loss) Requirement 3. What have you leamed from the comparison in Requirement 2? The oporating income difference calculated on the lotal analysis of dropping a product ine the expected decrease in operating income if Secunty System dreps the industrial systerns product ine, as shown in Requirment 1. This demonstrates that the diflerential analysis approach in Requimement 1 yioids result as the longer approach in Requirement 2 that compares total operating income under the two Requirements 1. Prepare a dferental anclysa to show whether Secunty System should drop the industrial ontems product ine 2. Prepare contbuton margin income statements to show Securify Syliem's betal operasing Compare the diflereace bolween be foro alsematver' inocme numbers to your answer to Aequerement 1. 3. What heve you leamed bem Be comparison in Hequirement 2y In operaing income line. Compare the difference between the two alternatives' income numbers to your antwer to Requirement 1 . (Whe parentheses or a minus sign for an eperating lose) For the Yoar Ended May 31, 2024 Totals With Totals Without Change if Industrial Industrial Systems Industrial Systems Systems is Dropped Not Sales Revenue Variable Costs: Manufacturing Selling and Administratwo Total Variablo Costs Contribution Margin Flowed Costs: Manutacturing Solling and Administrative Total Food Costs Operating Income (Loss) Requirement 3. What have you leamed from the comparison in Requirement 2? The oporating income difference calculated on the lotal analysis of dropping a product ine the expected decrease in operating income if Secunty System dreps the industrial systerns product ine, as shown in Requirment 1. This demonstrates that the diflerential analysis approach in Requimement 1 yioids result as the longer approach in Requirement 2 that compares total operating income under the two