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 $83,000 and decrease fixed selling and administrative expenses by $14,000. Read the requirements Requirement 1. Prepare a differential analysis to show whether Security Team should drop the industrial systems product line. Data table Security Team Income Statement in operating income For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $ 350,000 $ 360,000 $ 710,000 Requirements Net Sales Revenue Cost of Goods Sold: Variable 35,000 48,000 83,000 Fixed 240,000 69,000 309,000 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? Total Cost of Goods Sold 275,000 117,000 392,000 Gross Profit 75,000 243,000 318,000 Selling and Administrative Expenses: Variable 65,000 71,000 28,000 136,000 68,000 Print Done Fixed 40,000 105,000 99,000 204,000 Total Selling and Administrative Expenses $ (30,000) $ 144,000 $ 114,000 Operating Income (Loss) Help me solve this Demodocs example Get more help