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Requirement 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
Requirement 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. (Use parentheses or a minus sign for an operating loss.) Security Team Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals Without Industrial Systems Change if Industrial Systems Is Dropped Totals With Industrial Systems 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 Team Income Statement For the Year Ended May 31, 2018 Product Line Industrial Household Systems Systems Total $330,000 $360,000 $ 690,000 Net Sales Revenue Cost of Goods Sold: 40,000 240,000 280,000 50,000 Variable 44,000 84,000 69,000 309,000 113,000 393,000 247,000 297,000 Fixed Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: 66,000 39,000 105,000 Variable 75,000 141,000 60,000 96,000201,000 $ (55,000) $ 151,000 $ 96,000 21,000 Fixed Total Selling and Administrative Expenses Operating Income (Loss) Print Done
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