Cotrone Beverages makes energy drinks in three flavors: Original, Strawberry, and Orange. 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 Sales Variable costs Contribution margin Original $32,400 22,680 Fixed costs allocated to each product line Operating profit (loss) $ 9,720 4,700 $ 5,020 Strawberry $42,300 38,070 $ 4,230 5,900 $ (1,670) Orange $51,400 41,120 $10,280 6,900 $ 3,380 Required: a. Prepare a differential cost schedule. Revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profit (loss) Status Quo Alternative: Drop Difference (all lower under Strawberry the alternative) b. Should Cotrone drop the Strawberry product line? Yes No