This Members of the board of directors of Adobe Security have received the following operating income data for the year just ended: (Click the icon to view the operating income data.) Members of the board are surprised that the industrial systems product line is losing money. 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 fond marketing and administrative expenses by $14,000 Requirements 1. Prepare an incremental analysis to show whether Adobe Security should drop the Industrial systems product line. 2. Prepare contribution margin income statements to show Adobe Security'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 this comparison? Requirement 1. Prepare an incremental analysis to show whether Adobe Security should drop the industrial systems product tine, Adobe Security Incremental Analysis of Dropping a Product Line Expected decrease in revenues Dropping Industrial systems sales Expected decrease in expenses: Variable expenses Cost of goods sold Marketing and administrative expenses Fixed expenses Cost of goods sold Marketing and administrative expenses Enter any number in the edit fields and then continue to the next question his Question: 5 pts 1 of 45 (0 complote) This Test: 120 pts possible irec Unt cum Members of the board of directors of Adobe Security have received the following Requirements operating income data for the year just ended 1. Prepare an incremental analysis to show whether Adobe Security should drop Click the icon to view the operating Income data.) the industrial systems product line 2. Prepare contribution margin income statements to show Adobe Security's total Members of the board are surprised that the industrial systems product line is operating income under the two alternatives: (a) with the industrial systems losing money. They commission a study to determine whether the company should line and (b) without the line. Compare the difference between the two drop the line Company accountants estimate that dropping industrial systems will alternatives income numbers to your answer to Requirement 1. What have decrease fixed cost of goods sold by $83,000 and decrease fixed marketing and you learned from this comparison? administrative expenses by $14,000. Requirement 2. Prepare contribution margin income statements to show Adobe Security's total operating income under the two alternatives: (a) with the industrial systems in 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 this comparison? Begin by preparing the statements with and without the industrial systems in the prepare the contribution margin Income statement showing the decrease if the industrial systems line is dropped. (Une parentheses or a minus sign for an operating loss.) Adobe Security Total Analysis of Dropping Product Line Decrease if Totals With Industrial Systems Industrial Systems Industrial Systems Is Dropped Salos revenue Variable expenses Cont of goods sold GUM Totals Without 2015-T Klara Enter any number in the edit fields and then continue to the next question. ? 020-T Klara Members of the board of directors of Adobe Security have received the following Requirements operating income data for the year just ended: 1. Prepare an incremental analysis to show whether Adobe Security should drop (Click the icon to view the operating income data.) the industrial systems product line 2. Prepare contribution margin income statements to show Adobe Security's total Members of the board are surprised that the industrial systems product line is operating income under the two alternatives: (a) with the industrial systems losing money. They commission a study to determine whether the company should line and (b) without the line. Compare the difference between the two drop the line. Company accountants estimate that dropping industrial systems will alternatives' income numbers to your answer to Requirement 1. What have decrease fixed cost of goods sold by $83,000 and decrease fixed marketing and you learned from this comparison? administrative expenses by $14,000 Totar vanae expenses Contribution margin Fixed expenses Cost of goods sold Marketing and administrative expense Totalfixed expenses Operating income (los) What have you learned from this comparison? The operating income difference calculated on the total analysis of dropping a product line the expected decrease in operating income il Adobe Security drops the industrial systems product line, as shown in Requirement 1. This demonstrates that the incremental analysis approach in Requirement fields results as the longer approach in Requiremont 2 that compares total operating income under the two alternatives, Enter any number in the edit fields and then continue to the next question. * More Info - X Jer Adot ct ey th arp slo our Product Line to shov with the ence bet Require Industrial Household 55 $14 Systems Systems Total $ 340,000 $ 390,000 $ 730,000 Sales revenue. ind Cost of goods sold: Variable Anal 38,000 $ 260,000 Fixed 49,000 $ 67,000 87.000 327,000 vend 298,000 116,000 414,000 yster Total cost of goods sold Gross profit Marketing and administrative expenses: Variable 42,000 expen 274,000 316,000 old 68,000 41,000 71.000 25,000 139,000 66,000 dminid Fixed Total marketing and administrative expenses Operating income (loss). old 109,000 (67.000) $ 96,000 205,000 178,000 $111.000 adming edit Print Dono