80.2K

Verified Solution

Link Copied!

Please read the requirements and do those too!

= Homework: CHAPTER M-8 Question 2, PM8-29B (book/static) Part 1 of 3 HW Score: 0%, 0 of 5 points O Points: 0 of 1 Save Members of the board of directors of Security Team have received the following operating income data for the year ended March 31, 2024: E: (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 $81,000 and decrease fixed selling and administrative expenses by $15,000. Read the requirements. Data table . Security Team Requirement 1. Prepare a differential analysis to show whether Security Team should drop the industrial systems product line. (Use pare Income Statement For the Year Ended March 31, 2024 Product Line Industrial Household Systems Systems Total $ 300,000 $ 330,000 $ 630,000 Net Sales Revenue in operating income Cost of Goods Sold: Variable 77,000 35,000 210,000 42,000 63,000 Fixed 273,000 - X Requirements Total Cost of Goods Sold 245,000 105,000 350,000 Gross Profit 55,000 225,000 280,000 Selling and Administrative Expenses: Variable 77,000 143,000 1. Prepare a differential analysis to show whether Security Team should drop the industrial systems product line. 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. 3. What have you learned from the comparison in Requirement 2? 66,000 39,000 Fixed 28,000 67,000 105,000 105,000 210,000 Total Selling and Administrative Expenses $ (50,000) $ 120,000 $ 70,000 Operating Income (Loss) Print Done Print Done HelTYTTUUT UTY = Homework: CHAPTER M-8 Question 2, PM8-29B (book/static) Part 1 of 3 HW Score: 0%, 0 of 5 points O Points: 0 of 1 Save Members of the board of directors of Security Team have received the following operating income data for the year ended March 31, 2024: E: (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 $81,000 and decrease fixed selling and administrative expenses by $15,000. Read the requirements. Data table . Security Team Requirement 1. Prepare a differential analysis to show whether Security Team should drop the industrial systems product line. (Use pare Income Statement For the Year Ended March 31, 2024 Product Line Industrial Household Systems Systems Total $ 300,000 $ 330,000 $ 630,000 Net Sales Revenue in operating income Cost of Goods Sold: Variable 77,000 35,000 210,000 42,000 63,000 Fixed 273,000 - X Requirements Total Cost of Goods Sold 245,000 105,000 350,000 Gross Profit 55,000 225,000 280,000 Selling and Administrative Expenses: Variable 77,000 143,000 1. Prepare a differential analysis to show whether Security Team should drop the industrial systems product line. 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. 3. What have you learned from the comparison in Requirement 2? 66,000 39,000 Fixed 28,000 67,000 105,000 105,000 210,000 Total Selling and Administrative Expenses $ (50,000) $ 120,000 $ 70,000 Operating Income (Loss) Print Done Print Done HelTYTTUUT UTY

Answer & Explanation Solved by verified expert

See Answer