Members of the board of directors of Security Team 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 fond cost of goods sold by $81,000 and decrease fored marketing and administrative expenses by $15,000 Read the requirements. Requirement 1. Prepare an incremental analysis to show whether Security Team should discontinue the industrial systems product line. Incremental Analysis for Discontinuation Decision Contribution margin lost if Industrial Systems is discontinued Less: Fixed cost savings if Industrial Systems is discontinued Operating income Industrial Systems is discontinued Requirement 2. Prepare contribution margin income statements to show Security Team'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. 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 the industrial systems line is discontinued. (Use parentheses or a minus sign for an operating loss.) Security Team Total Analysis of Discontinuing a Product Line Choose from any list or enter any number in the input fields and then continue to the next question 0 Requirements 1. Prepare an incremental analysis to show whether Security Team should discontinue the industrial systems product line. 2. Prepare contribution margin income statements to show Security Team'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. What have you learned from this comparison? Print Done Security Team Product Line Contribution Margin Income Statement For the Year Product lines Industrial Household Company Systems Systems Total Sales revenue 280,000 $ 370,000 $ 650,000 Less cost of goods sold: Variable 34,000 48,000 82,000 Fixed 240,000 65,000 305,000 Gross profit 6,000 $ 257,000 $ 263,000 Less marketing and administrative expenses: Variable 66,000 74,000 140,000 Fixed 44,000 21,000 65,000 Operating income (loss) (104,000) $ 162,000 $ 58,000 00 Print Done