90.2K

Verified Solution

Link Copied!

Table for reference. Thanks!

Members of the board of directors of Security One 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 should drop the line. Company accountants estimate that dropping industrial systems will decrease fix by $81,000 and decrease fixed selling and administrative expenses by $10,000. Read the requirements. - X Data table Requirement 1. Prepare a differential analysis to show whether Security One should drop the industrial systems product line. (Use parent Expected decrease in revenues (310000) Security One Expected decrease in total variable costs Income Statement Expected decrease in fixed costs For the Year Ended May 31, 2024 Expected decrease in total costs Product Line Expected decrease in operating income Industrial Household Systems Systems Total Net Sales Revenue $ 310,000 $ 320,000 $ 630,000 Cost of Goods Sold: Variable 40,000 42,000 82,000 Fixed 210,000 64,000 274,000 Total Cost of Goods Sold 250,000 106,000 356,000 Gross Profit 60,000 214,000 274,000 Selling and Administrative Expenses: Variable 66,000 77.000 143,000 Fixed 41,000 28.000 69.000 Total Selling and Administrative Expenses 107,000 105,000 212,000 $ (47,000) $ 109,000 $ 62,000 Operating Income (Loss) Print Done

Answer & Explanation Solved by verified expert

See Answer