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SECURITY CHECK Income Statement For the Year Ended May 31, 2024 Product Line Industrial Systems Household Systems Total Net Sales Revenue S 360,000 $ 380,000 $ 740,000 Cost of Goods Sold: Variable 37,000 47,000 84,000 Fixed 260,000 63,000 323,000 Total Cost of Goods Sold 297,000 110,000 407,000 Gross Profit 63,000 270,000 333,000 Selling and Administrative Expenses: Variable 64,000 73,000 137,000 Fixed 44,000 26,000 70,000 Total Selling and Administrative Expenses 108,000 99,000 207,000 Operating Income (Loss) S (45,000) $ 171,000 $ 126,000

SECURITY CHECK Income Statement For the Year Ended May 31, 2024 Product Line Industrial Systems Household Systems Total Net Sales Revenue S 360,000 $ 380,000 $ 740,000 Cost of Goods Sold: Variable 37,000 47,000 84,000 Fixed 260,000 63,000 323,000 Total Cost of Goods Sold 297,000 110,000 407,000 Gross Profit 63,000 270,000 333,000 Selling and Administrative Expenses: Variable 64,000 73,000 137,000 Fixed 44,000 26,000 70,000 Total Selling and Administrative Expenses 108,000 99,000 207,000 Operating Income (Loss) S (45,000) $ 171,000 $ 126,000

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter25: Departmental Accounting
Section: Chapter Questions
Problem 9SPA: INCOME STATEMENT WITH DEPART MENTAL DIRECT OPERATING MARGIN AND TOTAL OPERATING INCOME Durwood...
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Help please... also for 2b.) $(41,000)

**Security Check: Income Statement for the Year Ended May 31, 2024** This income statement provides a detailed breakdown of the financial performance for Security Check, specified by product lines: Industrial Systems and Household Systems. The statement includes figures for Net Sales Revenue, Cost of Goods Sold, Gross Profit, Selling and Administrative Expenses, and Operating Income for the fiscal year. **Product Line Analysis:** 1. **Net Sales Revenue:** - Industrial Systems: $360,000 - Household Systems: $380,000 - Total: $740,000 2. **Cost of Goods Sold:** - **Variable Costs:** - Industrial Systems: $37,000 - Household Systems: $47,000 - Total Variable Costs: $84,000 - **Fixed Costs:** - Industrial Systems: $260,000 - Household Systems: $63,000 - Total Fixed Costs: $323,000 - **Total Cost of Goods Sold:** - Industrial Systems: $297,000 - Household Systems: $110,000 - Total: $407,000 3. **Gross Profit:** - Industrial Systems: $63,000 - Household Systems: $270,000 - Total Gross Profit: $333,000 4. **Selling and Administrative Expenses:** - **Variable Expenses:** - Industrial Systems: $64,000 - Household Systems: $73,000 - Total Variable Expenses: $137,000 - **Fixed Expenses:** - Industrial Systems: $44,000 - Household Systems: $26,000 - Total Fixed Expenses: $70,000 - **Total Selling and Administrative Expenses:** - Industrial Systems: $108,000 - Household Systems: $99,000 - Total: $207,000 5. **Operating Income (Loss):** - Industrial Systems: $(45,000) - Household Systems: $171,000 - Total Operating Income: $126,000 **Summary:** The statement showcases the profitability of each product line, with Household Systems generating a significant operating income while Industrial Systems reported a loss. This financial document assists in evaluating the cost structures and profitability of different product segments within the company.
Transcribed Image Text:**Security Check: Income Statement for the Year Ended May 31, 2024** This income statement provides a detailed breakdown of the financial performance for Security Check, specified by product lines: Industrial Systems and Household Systems. The statement includes figures for Net Sales Revenue, Cost of Goods Sold, Gross Profit, Selling and Administrative Expenses, and Operating Income for the fiscal year. **Product Line Analysis:** 1. **Net Sales Revenue:** - Industrial Systems: $360,000 - Household Systems: $380,000 - Total: $740,000 2. **Cost of Goods Sold:** - **Variable Costs:** - Industrial Systems: $37,000 - Household Systems: $47,000 - Total Variable Costs: $84,000 - **Fixed Costs:** - Industrial Systems: $260,000 - Household Systems: $63,000 - Total Fixed Costs: $323,000 - **Total Cost of Goods Sold:** - Industrial Systems: $297,000 - Household Systems: $110,000 - Total: $407,000 3. **Gross Profit:** - Industrial Systems: $63,000 - Household Systems: $270,000 - Total Gross Profit: $333,000 4. **Selling and Administrative Expenses:** - **Variable Expenses:** - Industrial Systems: $64,000 - Household Systems: $73,000 - Total Variable Expenses: $137,000 - **Fixed Expenses:** - Industrial Systems: $44,000 - Household Systems: $26,000 - Total Fixed Expenses: $70,000 - **Total Selling and Administrative Expenses:** - Industrial Systems: $108,000 - Household Systems: $99,000 - Total: $207,000 5. **Operating Income (Loss):** - Industrial Systems: $(45,000) - Household Systems: $171,000 - Total Operating Income: $126,000 **Summary:** The statement showcases the profitability of each product line, with Household Systems generating a significant operating income while Industrial Systems reported a loss. This financial document assists in evaluating the cost structures and profitability of different product segments within the company.
**Study on the Industrial Systems Product Line** **Background:** 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 the fixed cost of goods sold by $80,000 and decrease fixed selling and administrative expenses by $12,000. **Requirements:** 1. **Differential Analysis:** - Prepare a differential analysis to determine if Security Check should discontinue the industrial systems product line. 2. **Contribution Margin Income Statements:** - Create contribution margin income statements to determine Security Check’s total operating income under two scenarios: - (a) With the industrial systems line. - (b) Without the industrial systems line. - Compare the income differences between the two scenarios to your answer from the differential analysis in requirement 1.
Transcribed Image Text:**Study on the Industrial Systems Product Line** **Background:** 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 the fixed cost of goods sold by $80,000 and decrease fixed selling and administrative expenses by $12,000. **Requirements:** 1. **Differential Analysis:** - Prepare a differential analysis to determine if Security Check should discontinue the industrial systems product line. 2. **Contribution Margin Income Statements:** - Create contribution margin income statements to determine Security Check’s total operating income under two scenarios: - (a) With the industrial systems line. - (b) Without the industrial systems line. - Compare the income differences between the two scenarios to your answer from the differential analysis in requirement 1.
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