The pictures of requirements 2 and 3 are just there as examples of how to solve for those requirements the boxes to be filled in were not specifically provided.

This is needed for the above data but the information below is a sample.

Members of the board of directors of Safe Zone have received the following operating income data for the year ended May 31, 2018: (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 $83,000 and decrease fixed selling and administrative expenses by $15,000. Read the requirements. Requirement 1. Prepare a differential analysis to show whether Safe Zone should drop the industrial systems product line. (Use parentheses or a minus sign to enter decreases to profits.) in operating income Data table Safe Zone Income Statement For the Year Ended May 31, 2018 Net Sales Revenue Cost of Goods Sold: Variable Fixed Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable Fixed Total Selling and Administrative Expenses Operating Income (Loss) $ $ Product Line Industrial Systems Household Systems 300,000 $ 33,000 230,000 263,000 37,000 68,000 39,000 107,000 (70,000) $ Total 330,000 $630,000 48,000 81,000 62,000 292,000 110,000 373,000 220,000 257,000 C 75,000 143,000 29,000 68,000 104,000 211,000 116,000 $ 46,000 Requirements 1. 2. 3. Prepare a differential analysis to show whether Safe Zone should drop the industrial systems product line. Prepare contribution margin income statements to show Safe Zone'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 the comparison in Requirement 2? Print Done X Requirement 2. Prepare contribution margin income statements to show Control 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. A contribution margin income statement groups costs by behavior-variable costs or fixed costs-and highlights the contribution margin. Begin with the contribution margin income statement with the industrial systems line. The revenue and cost amounts are taken from the total column of the income statement provided in the given information and have been entered for you. Complete the income statement by calculating the applicable totals, subtotals, and operating income. (Use parentheses or a minus sign for an operating loss.) Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: Control One Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Industrial Systems 620,000 Fixed Manufacturing Costs Fixed Selling and Administrative Costs 83,000 132,000 215,000 405,000 $ Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss) Now consider the totals without the Industrial Systems line. We know the variable costs will be reduced by the variable costs of the Industrial line. Additionally, we are told that dropping industrial systems will decrease fixed manufacturing costs by $82,000 and decrease fixed selling and administrative costs by $15,000. Compute the "totals without industrial systems" amounts for both fixed cost categories (manufacturing and selling and administrative costs) by completing the computations below. Totals Without Industrial Systems 298,000 62,000 360,000 45,000 Change if Industrial Systems Is Dropped Totals with Industrial Systems 298,000 62,000 Decrease if dropped 82,000 15,000 Totals without Industrial Systems 216,000 47,000 Next compute the totals without the Industrial Systems line. The sales revenue will be reduced by the sales in the Industrial line (essentially leaving only the sales revenue of the Household line). Additionally, as discussed above, the variable costs will be reduced by the variable costs of the Industrial line (essentially leaving only the variable costs of the Household line). 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) Control One Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Industrial Systems 620,000 $ 83,000 132,000 215,000 405,000 Totals Without Industrial Systems 320,000 298,000 62,000 360,000 45,000 $ 44,000 70,000 114,000 206,000 216,000 47,000 263,000 (57,000) Change if Industrial Systems Is Dropped Finally, calculate the change if the Industrial Systems line is dropped. Control One Contribution Margin Income Statement For the Year Ended May 31, 2018 Totals With Industrial Systems Net Sales Revenue Variable Costs: Manufacturing Selling and Administrative Total Variable Costs Contribution Margin Fixed Costs: 620,000 $ 83,000 132,000 215,000 405,000 298,000 62,000 360,000 Totals Without Industrial Systems 45,000 $ 320,000 $ 44,000 70,000 114,000 206,000 Change if Industrial Systems Is Dropped 300,000 Manufacturing Selling and Administrative Total Fixed Costs Operating Income (Loss) Requirement 3. What have you learned from the comparison in Requirement 2? Compare the difference between the two alternatives' income numbers in Requirement 2 to your answer to Requirement 1. What have you learned from this comparison? 216,000 47,000 39,000 62,000 101,000 199,000 263,000 (57,000) $ 82,000 15,000 97,000 102,000 How does the operating income difference calculated in the total analysis of dropping a product line compare to the expected decrease in operating income calculated in the differential analysis prepared in Requirement 1? Do the two methods yield the same results or different results