Safety Step
Income Statement
For the Year Ended May 31, 2024
	Product Line
	Industrial Systems	Household Systems	Total
Net Sales Revenue	$310,000	$320,000	$630,000
Cost of Goods Sold:
Variable	34,000	43,000	77,000
Fixed	250,000	69,000	319,000
Total Cost of Goods Sold	284,000	112,000	396,000
Gross Profit	26,000	208,000	234,000
Selling and Administrative Expenses:
Variable	66,000	76,000	142,000
Fixed	43,000	24,000	67,000
Total Selling and Administrative Expenses	109,000	100,000	209,000
Operating Income (Loss)	$(83,000)	$108,000	$25,000

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Members of the board of directors of Safety Step have received the following operating income data for the year ended May 31,2024 : (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 shou drop the line. Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $80,000 and decrease fixed selling and administrative expenses by $12,000. 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.) Members of the board of directors of Safety Step have received the following operating income data for the year ended May 31,2024 : (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 shou drop the line. Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $80,000 and decrease fixed selling and administrative expenses by $12,000. 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.)