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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

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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 Original Strawberry Sales Orange $33,300 $43,500 $51,000 Variable costs 23,310 39,150 40.800 Contribution margin $ 9,990 $ 4,350 $10,200 Fixed costs allocated to each product line 5,300 6,400 7,000 Operating profit (los) $ 4,690 $(2,050) $ 3,200 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 Product Sales Variable costs Contribution margin Fixed costs allocated to each product line Operating profit (loss) Original $33,300 23.310 $ 9,990 5.300 $ 4,690 Strawberry $43,500 39.250 $ 4,350 6.400 ${2,050) Orange $51.000 40,800 $10,200 7.000 $ 3,200 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 Contribution margin Less: Fixed costs Operating profit (loss)

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