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:

ProductOriginalStrawberryOrangeSales$32,100$42,900$50,900Variable costs22,47038,61040,720Contribution margin$9,630$4,290$10,180Fixed costs allocated to each product line4,5005,8007,500Operating profit (loss)$5,130$(1,510)$2,680

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.)

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.) Alternative: Status Quo Drop Difference Strawberry Revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profit (loss)