Prepare the contribution margin income statements to show securities one’s total operating income under the two alternatives with the industrial systems, line and be without the line. KMembers 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 accountantsestimate that dropping industrial systems will decrease fixed cost of goods sold by $82,000 and decrease fixed selling and administrative expenses by $10,000.Net Sales RevenueVariable Costs:ManufacturingSelling and AdministrativeTotal Variable CostsContribution MarginFixed Costs:ManufacturingSelling and AdministrativeTotal Fixed CostsOperating Income (Loss)Contribution Margin Income StatementFor the Year Ended May 31, 2024Totals WithIndustrial Systems630,000$$77,000136,000213,000417,000299,00061,000360,00057,000Totals WithoutIndustrial Systems320000340006500099000221000Change if IndustrialSystems Is Dropped mstsgin9dmSne (Net Sales RevenueCost of Goods Sold:VariableIncome StatementFor the Year Ended May 31, 2024FixedTotal Cost of Goods SoldGross ProfitSelling and Administrative Expenses:VariableFixedTotal Selling and Administrative ExpensesOperating Income (Loss)Print$Product LineIndustrialSystems$Total310,000 $ 320,000 $630,00034,000230,000264,00046,000HouseholdSystems65,00040,000105,000(59,000) $Done43,00077,00069,000 299,000112,000 376,000208,000 254,00071,000 136,00021,00061,00092,000197,000116,000 $57,000

Contribution margin income statement:Under this income statement, both the variable and fixed costs…

Answered: Prepare the contribution margin income…

Prepare the contribution margin income statements to show securities one’s total operating income under the two alternatives with the industrial systems, line and be without the line.

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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Question

100%

Prepare the contribution margin income statements to show securities one’s total operating income under the two alternatives with the industrial systems, line and be without the line.

K
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 fixed cost of goods sold by $82,000 and decrease fixed selling and administrative expenses by $10,000.
Net Sales Revenue
Variable Costs:
Manufacturing
Selling and Administrative
Total Variable Costs
Contribution Margin
Fixed Costs:
Manufacturing
Selling and Administrative
Total Fixed Costs
Operating Income (Loss)
Contribution Margin Income Statement
For the Year Ended May 31, 2024
Totals With
Industrial Systems
630,000
$
$
77,000
136,000
213,000
417,000
299,000
61,000
360,000
57,000
Totals Without
Industrial Systems
320000
34000
65000
99000
221000
Change if Industrial
Systems Is Dropped

m
sts
gin
9
dm
S
ne (
Net Sales Revenue
Cost of Goods Sold:
Variable
Income Statement
For the Year Ended May 31, 2024
Fixed
Total Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses:
Variable
Fixed
Total Selling and Administrative Expenses
Operating Income (Loss)
Print
$
Product Line
Industrial
Systems
$
Total
310,000 $ 320,000 $630,000
34,000
230,000
264,000
46,000
Household
Systems
65,000
40,000
105,000
(59,000) $
Done
43,000
77,000
69,000 299,000
112,000 376,000
208,000 254,000
71,000 136,000
21,000
61,000
92,000
197,000
116,000 $
57,000

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