Requirement 2. Prepare contribution margin income statements to show Security First'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.) Security First Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Totals Without Industrial Systems Industrial Systems Change if Industrial 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) Security First Income Statement For the Year Ended May 31, 2018 Product Line Industrial Systems Household Systems Total Net Sales Revenue $ 340,000 $ 360,000 $ 700,000 Cost of Goods Sold: Variable 39,000 43,000 66,000 82,000 316,000 Fixed 250,000 Total Cost of Goods Sold 289,000 109,000 398,000 Gross Profit 51,000 251,000 302,000 Selling and Administrative Expenses: Variable 63,000 74,000 137,000 65,000 Fixed 38,000 27,000 Total Selling and Administrative Expenses 101,000 101,000 202,000 Operating Income (Loss) (50,000) $ 150,000 $ 100,000 Members of the board of directors of Security First have received the following operating income data for the year ended May 31, 2018: E (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 $81,000 and decrease fixed selling and administrative expenses by $10,000. Read the requirements Requirement 1. Prepare a differential analysis to show whether Security First should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) $ (340,000) Expected decrease in revenues Expected decrease in total variable costs 102,000 Expected decrease in fixed costs 91,000 Expected decrease in total costs 193,000 Expected decrease in operating income $ (147,000)