2 Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 3,400 meals: Per Unit $6.40 2 points Sales revenue Amount $21,760 Costs of meals produced 15,980 4.70 Gross profit $ 5,780 $1.70 Administrative costs 2,380 0.70 Operating profit $ 3,400 $ 1.00 eBook Print References Fixed costs included in this income statement are $5,236 for meal production and $680 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.70 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo 3,400 Units Alternative 3,700 Units Difference Sales revenue Variable costs: Meals Administrative Contribution margin Fixed costs Operating profit b. From an operating profit perspective for April, should Maria accept the order? Yes No Che 2 3 points 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 Original eBook Variable costs $32,400 22,680 Contribution margin Print Fixed costs allocated to each product line Operating profit (loss) $ 9,720 4,900 $ 4,820 Strawberry $42,600 38,340 $ 4,260 5,900 $ (1,640) Orange $50,800 40,640 $10,160 6,900 $ 3,260 References 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.) Revenue Less: Variable costs. Contribution margin Less: Fixed costs Operating profit (loss) Status Quo Alternative: Drop Strawberry Difference b. Should Cotrone drop the Strawberry product line? Yes No Check m