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clon of Secunty Check have receved folowing perating income daa for the year ended May 31, 2024 2h. M41,0000 SECURITY CHEOK ncome Statement For the Year Ended May 31, 2024 Produst une ndutriel Syrtema Houehald yrtema Ttal Net Sales eveue Cntof Goods Sok Variale 7,000 Fied ,000 Tetal Cot of Goo eld 401,000 Grm haf ,000 Seling and Adminitratie tpen Verialle 71,000 27,000 7, 000 207, 000 Ped Tutal eling and Adminratie tpenn Opering me m 108,000 1000 14,000 Memlen of the lnl arepised d the indarl y prodet lne is ot prolie dile. They comminkna aly deermine wleder the company shnkl drop the ine. Campany aceuntas eimate that dropping inshaial sptems will derese fied co of a wal ly SKD and deree fied selling and alminitrive espenes by $12. Requirements 1. Prepare a dfierential analysis o shuw whether Neeurity Check should drop the indutrial sytems praluct ine. 2. Prepare contiluion margin income satements to show Security Check's soal operating income under the wo ahernative (0 with the industrial systems line and () without the line, Compare the dren between the rwo ahernatives

clon of Secunty Check have receved folowing perating income daa for the year ended May 31, 2024 2h. M41,0000 SECURITY CHEOK ncome Statement For the Year Ended May 31, 2024 Produst une ndutriel Syrtema Houehald yrtema Ttal Net Sales eveue Cntof Goods Sok Variale 7,000 Fied ,000 Tetal Cot of Goo eld 401,000 Grm haf ,000 Seling and Adminitratie tpen Verialle 71,000 27,000 7, 000 207, 000 Ped Tutal eling and Adminratie tpenn Opering me m 108,000 1000 14,000 Memlen of the lnl arepised d the indarl y prodet lne is ot prolie dile. They comminkna aly deermine wleder the company shnkl drop the ine. Campany aceuntas eimate that dropping inshaial sptems will derese fied co of a wal ly SKD and deree fied selling and alminitrive espenes by $12. Requirements 1. Prepare a dfierential analysis o shuw whether Neeurity Check should drop the indutrial sytems praluct ine. 2. Prepare contiluion margin income satements to show Security Check's soal operating income under the wo ahernative (0 with the industrial systems line and () without the line, Compare the dren between the rwo ahernatives

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Members of the board of directors of Security Check have received the following operating income data for the year ended May 31, 2024 2b. S441,000) SECURITY CHECK Income Statement For the Year Ended May 31, 2024 Froduct Line ndurtrial Hounehold Syrtema Syrtema Tetal Net Sales Revenue $ 200,000 Cont of Goods Solt Variable 27,000 47,000 Fied 200,000 2,000 222,000 Tetal Cont of Goods Sold 237,000 110,000 407,000 Gram Profit a,000 270,000 222,000 Seling and Admiristratie tpen Variable 64000 72,000 127,000 Fied 44,000 70,000 Tutal Seling and Administrative tpenn Operting nme m 1000 S 17L000 207,000 S124,000 Memben of the boand are wrprised tat the indatrial wysem prodact line is not profie- alle. They commisskon a ly o deermine wheher the company shoukd drop the line. Company accountams estimate that dropping indlnrial syotema will decrease fised cot of gah wl by SJK0 and decrease fised seling and administrative espenses by $12J0. Requirements 1. Prepare a differemial analysis to show whether Security Check should drop the industrial systems product ine. 2. Prepare contribuion margin income statements to show Security Check's total operating income under the wo ahernative: () with the industrial systema line and (1) without the line, Compare the diiereaa between the rwo ahernatives income numben to your ansuer to Requirement 1.
Transcribed Image Text:Members of the board of directors of Security Check have received the following operating income data for the year ended May 31, 2024 2b. S441,000) SECURITY CHECK Income Statement For the Year Ended May 31, 2024 Froduct Line ndurtrial Hounehold Syrtema Syrtema Tetal Net Sales Revenue $ 200,000 Cont of Goods Solt Variable 27,000 47,000 Fied 200,000 2,000 222,000 Tetal Cont of Goods Sold 237,000 110,000 407,000 Gram Profit a,000 270,000 222,000 Seling and Admiristratie tpen Variable 64000 72,000 127,000 Fied 44,000 70,000 Tutal Seling and Administrative tpenn Operting nme m 1000 S 17L000 207,000 S124,000 Memben of the boand are wrprised tat the indatrial wysem prodact line is not profie- alle. They commisskon a ly o deermine wheher the company shoukd drop the line. Company accountams estimate that dropping indlnrial syotema will decrease fised cot of gah wl by SJK0 and decrease fised seling and administrative espenses by $12J0. Requirements 1. Prepare a differemial analysis to show whether Security Check should drop the industrial systems product ine. 2. Prepare contribuion margin income statements to show Security Check's total operating income under the wo ahernative: () with the industrial systema line and (1) without the line, Compare the diiereaa between the rwo ahernatives income numben to your ansuer to Requirement 1.
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