4-49. Dropping Product Lines LO 4-4) 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 20 percent. Segmented income statements appear as follows. Product Sales Variable costs Contribution margin Fixed costs allocated to each product line Operating profit (loss) Original Strawberry Orange $65,200 $85,600 $102,400 44,000 77,200 80,200 $21,200 $ 8,400 $ 22,200 9,400 12,000 14,200 $11,800 $ (3,600) $ 8,000 Required