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Cotrone Beverages makes energy drinks in three favors: Original, Strawberry, and Orange. The company is currently operating at 75 percent of capacity. Worried about the

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Cotrone Beverages makes energy drinks in three favors: 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: a. Prepare a differential cost schedule. b. Should Cotrone drop the Strawberry product line? Yes No

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