Requirement 1 asks to prepare an incremental analysis to determine if Safety Systems should discontinue its industrial systems product line. Requirement 2 asks to prepare contribution margin income statements showing total operating income with and without the product line, and compare the difference to the incremental analysis. The comparison demonstrates that the incremental analysis approach yields the same results as the full contribution margin analysis in determining the expected decrease in operating income from discontinuing the product line.
Requirement 1 Prepare an incremental analysis to show wheth.pdf
1. Requirement 1. Prepare an incremental analysis to show whether Safety Systems should
discontinue the industrial systems product line. your answer to Requirement 1. What have you
learned from this comparison?The operating income difference calculated on the total analysis of
discontinuing a product line the expected decrease in operating income if Safety Systems
discontinues the industrial systems product line, as shown in Requirement 1. This demonstrates
that the incremental analysis approach in Requirement 1 yields results as the longer approach in
Requirement 2 that compares total operating income under the two alternatives.Data
tableRequirements 1. Prepare an incremental analysis to show whether Safety Systems should
discontinue the industrial systems product line. 2. Prepare contribution margin income statements
to show Safety Systems' 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?
