P25-23A (similar to) Question Help Members of the board of directors of Safety Step 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 $82,000 and decrease fixed selling and administrative expenses by $15,000. Read the requirements Requirement 1. Prepare a differential analysis to show whether Safety Step should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) Expected decrease in revenues Expected decrease in total variable costs Expected decrease in fixed costs Expected decrease in total costs Expected decrease in operating income Pict) - (simil Ques 1 Data Table ard of dire to view the ard are su accounta enses by he con sellir ents repare ad or a ase in rev ase in tota mcome statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total Net Sales Revenue $ 340,000 $ 360,000 $ 700,000 Cost of Goods Sold: Variable 39,000 49,000 88,000 Fixed 250,000 62,000 312,000 Total Cost of Goods Sold 289,000 111,000 400,000 Gross Profit 51,000 249,000 300,000 Selling and Administrative Expenses: Variable 65,000 72,000 137,000 Fixed 38,000 29,000 67,000 Total Selling and Administrative Expenses 103,000 101,000 204,000 $ Operating Income (Loss) (52,000) $ 148,000 $ 96,000 ase in fixe ase in tota ase vin op ist or ent Print Done Clor All Chock An Requirement 2. Prepare contribution margin income statements to show Safety Step'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. (Use parentheses or a minus sign for an operating loss.) Safety Step Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Totals Without Change if Industrial Industrial Systems Industrial Systems Systems Is Dropped Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss)