1 - 2 points eBook Print Cotrone Beverages makes energy drinks in three flavors: Original, Strawberry, and Orange. The company is currently operating at 75 percent of capacity. Worried about the company's performance, the company president is considering dropping the Strawberry flavor. If Strawberry is dropped, the revenue associated with it would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by 15 percent. Segmented income statements appear as follows: Product Sales Variable costs Original $33,200 23,240 Contribution margin References Fixed costs allocated to each product line Operating profit (loss) $ 9,960 5,300 $ 4,660 Strawberry $43,300 38,970 $ 4,330 6,400 $(2,070) Orange $51,200 40,960 $10,240 7,200 $ 3,040 Mc Graw Hill Required: a. Prepare a differential cost schedule. (Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo Alternative: Drop Strawberry Difference Revenue $ Less: Variable costs 127,700 $ 103,170 84,400 $ 64,200 43,300 38,970 decrease decrease < Prev 1 of 5 Next > Check my work 1 Contribution margin $ 9,960 Fixed costs allocated to each product line Operating profit (loss) 5,300 $ 4,660 2 points eBook Print References Mc Graw Hill Required: $ 4,330 6,400 $(2,070) $10,240 7,200 $ 3,040 a. Prepare a differential cost schedule. (Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo Alternative: Drop Strawberry Difference Revenue $ 127,700 $ Less: Variable costs 103,170 84,400 $ 64,200 43,300 38,970 decrease decrease Contribution margin $ 24,530 $ 20,200 $ 4,330 decrease Less: Fixed costs 18,900 Operating profit (loss) $ 5,630 < Prev 1 of 5 Next > Check my work