question archive Members of the board of directors of Security Force 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 of directors of Security Force have received the following operating income data for the year just ended: (Click the icon to view the operating income data

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Members of the board of directors of Security Force 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 $84,000 and decrease fixed marketing and administrative expenses by $9,000. Requirements 1. Prepare an incremental analysis to show whether Security Force should drop the industrial systems product line. 2. Prepare contribution margin income statements to show Security Force'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? ? More info Requirement 1. Prepare an incremental analysis to show whether Security Force should drop the industrial systems product line. Product Line Industrial Household Systems Systems Total $ 310,000 $ 340,000 $ 650,000 Sales revenue Security Force 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: Variable $ 49,000 $ 85,000 36,000 $ 300,000 Fixed 69,000 369,000 336,000 118,000 Total cost of goods sold 454,000 (26,000) 222,000 196,000 Cost of goods sold Marketing and administrative expenses Gross profit... Marketing and administrative expenses: Variable 64,000 39,000 78,000 30,000 142,000 69,000 Expected decrease in total expenses Fixed Total marketing and administrative expenses 103,000 108,000 211,000 Expected decrease in operating income $ (129,000) $ 114,000 $ (15,000) Operating income (loss)... Help me solve this Video Get more help nswer Print Done 16:12

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