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Please help with this question and the following requirements. Thank you! BA-213-0-20773 - Managerial Accounting Alexander Ghossein : 1 05/11/20 11:16 AM Save Homework: Chapter
Please help with this question and the following requirements. Thank you!
BA-213-0-20773 - Managerial Accounting Alexander Ghossein : 1 05/11/20 11:16 AM Save Homework: Chapter 08 Graded Homework Score: 0 of 10 pts P8-50A (similar to) 6 of 6 (0 complete) HW Score: 0%, 0 of 30 pts Question Help Company accountants estimate that discontinuing the industrial systems line will decrease fixed cost of goods sold by $82,000 and decrease fixed marketing and administrative expenses by $17,000. Members of the board of directors of Security One 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 Read the requirements Requirement 1. Prepare an incremental analysis to show whether Security One should discontinue the industrial systems product line. Total Incremental Analysis for Discontinuation Decision Contribution margin lost if Industrial Systems is discontinued Less: Fixed cost savings if Industrial Systems is discontinued Data Table A Requirements Operating income if Industrial Systems is discontinued Security One Product Line Contribution Margin Income Statement For the Year 1. Prepare an incremental analysis to show whether Security One should discontinue the industrial systems product line. 2. Prepare contribution margin income statements to show Security One'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? Product lines Industrial Household Company Systems Systems Total 300,000 $ 330,000 $ 630,000 Print Done Sales revenue Less cost of goods sold: Variable 36,000 240,000 43,000 65,000 79,000 305,000 24,000 $ 222,000 $ 246,000 Fixed Gross profit Less marketing and administrative expenses: Variable Fixed 61,000 44,000 (81,000) $ 68,000 28,000 126,000 $ 129,000 72,000 45,000 $ Operating income (loss) Print Done Choose from any list or enter any number in the input fields and then click CheckStep by Step Solution
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