Members of the board of directors of Arthur Products, Inc., have received the following income statement for the year just ended.

Members of the board are surprised that the industrial products division is losing money. They commission a study to determine whether the company should delete the industrial line. Company accountants estimate that dropping industrial products will decrease fixed cost of goods sold by $ 75,000 and decrease fixed selling and administrative expenses by $20,000.

Required:
Prepare an analysis to show Arthur Products' operating income with and without industrial products. Prepare the income statement in contributionformat.

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ARTHUR PRODUCTS, INC. INCOME STATEMENT Industrial Products Amount Household Products Amount Sales Cost of goods sold: Variable Fixed Total cost of goods sold Gross Margin Selling and administration expenses Variable Fixed Total Selling and Administration Expenses Operating income loss) S429.000 $421.000 64.000 241,000 305,000 124,000 55.000 86,000 141,000 280,000 92,000 31,000 86,000 58,000 144,000 (S20.000) 123,000 157.000