ances Lamothe Kitchen and Bath makes products for the home, which it sells through major retailers and remodeling (do-it-yourself, or DIY) outlets. One product that has had varying success is a ceiling fan for the kitchen. The fan comes in three sizes (36-Inch, 44-Inch, and 54-Inch), which are designed for various kitchen sizes and cooling requirements. The chief financial officer (CFO) at Lamothe has been looking at the segmented income statement for the fan and is concerned about the results for the 36- inch model. Revenues Variable costs 36 Inch $ 370,300 44 Inch $572,300 Fixed costs allocated to products 230,600 146,230 284,680 224,464 54 Inch $350,100 162,500 137,806 Operating profit (loss) $ (6,530) $ 63,156 $ 49,794 If the 36-Inch model 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 25 percent. Required: a. Prepare a differential cost schedule to support your recommendation. b. Should Lamothe Kitchen and Bath should drop the 36-Inch model product line? Required A Required B Prepare a differential cost schedule to support your recommendation. (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 Status Quo Alternative: Drop 36-Inch Fant Difference decrease decrease decrease decrease decrease Required A Required D >