Question Hote P25-23A (similar Members of the board of director 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) Monters 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 wil Read the Requirement 1. Prepare a diferencial analysis to show whether Security Team should drop the industrial systems product line. (Vor parentheses or a minus sign to enter decreases to profits. in operating income Members of the board of director of Security Team have received the following operating income data for the year ended May 31, 2018 Click the loon 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 wil decrease fixed cost of goods sold by $83,000 and decrease fixed seling and administrative expenses by $12.000 Read the requirements Security Team Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Total Without Change Industrial Industrial Systems Industrial Systems Systems is Dropped Net Sales Revenue wati Costs Manufacturing Selling and Administrative To Variable costs Contribution Marin Feed Cool Manual Selling and Administrative Total Fixed Costs Operating income Enter any number in the edit fields and then click Chick Answer remaining Clear AB Check Answer wirement 3. What have you learned from the comparison in Requirement 2? operating income difference calculated on the total analysis of dropping a product line the expected decrease in operating income if Security Team drops the industrial systems product line, as shown in Requirement 1. demonstrates that the differential analysis approach in Requirement yields rest as the longer approach in Requirement that compares total operating income under the two amaties to select your answers and then click Check Answer arts showing Check m have received the following operating income data for the year ended May 31, 2018: ata.) trial systems product line is not profitable. They commission a study to determine whether the company should drop the line. Company accountants estima decrease fixed selling and administrative expenses by $12,000. show whether Security Team should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) * Requirements 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? Print Done Data Table Security Team have received the Bing income data.) that the industrial systems produd $82,000 and decrease fixed selli Company accountants estimate that droppin al analysis to show whether Secur bases to profits.) income Security Team Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total Net Sales Revenue 330,000 $ 360,000 $ 690,000 Cost of Goods Sold: Variable 33,000 44,000 77,000 Fixed 250,000 66,000 316,000 Total Cost of Goods Sold 283,000 110,000 393,000 Gross Profit 47,000 250,000 297,000 Selling and Administrative Expenses: Variable 69,000 72,000 141,000 Fixed 40,000 28,000 68,000 Total Selling and Administrative Expenses 109,000 100,000 209,000 (62,000) $ 150,000 $ 88,000 Operating Income (L03) umber in the input fields and Print Done Clear All Che
