Members of the board of directors of Security Team have received the following operating income data for the year just ended:

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 fixed cost of goods sold by $78,000 and decrease fixed marketing and administrative expenses by 13,000

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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 i Data Table Security Team Product Line Contribution Margin Income Statement For the Year Product lines Industrial Household Company Systems Systems Total 340,000 $ 370,000 $ 710,000 Sales revenue $ Less cost of goods sold: Variable 34,000 270,000 47,000 64,000 81,000 334,000 Fixed Gross profit 36,000 $ 259,000 $ 295,000 Less marketing and administrative expenses: Variable Fixed 67,000 36,000 (67,000) $ 75,000 21,000 163,000 $ 142,000 57,000 96,000 $ Operating income (loss) Print Done