Members of the board of directors of Security Team 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 $80,000 and decrease fixed selling and administrative expenses by $10,000 Read the requirements Requirement 1. Prepare a differential analysis to show whether Security Team should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) Data Table in operating income Security Team Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total 330,000 $ 360,000 $ 690,000 Requirements Net Sales Revenue Cost of Goods Sold: Variable 36,000 240,000 Fixed 46,000 68,000 114,000 82,000 308,000 390,000 276,000 1. Prepare a differential analysis to show whether Security Team should drop 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. 3. What have you learned from the comparison in Requirement 2? 54,000 246,000 300,000 Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable Fixed Print Done 61,000 38,000 99,000 (45,000) $ 72,000 133,000 21,000 59.000 93,000 192,000 153,000 $ 108,000 Total Selling and Administrative Expenses $ Operating Income (Loss) Print Done