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	Original			Strawberry			Orange
Sales	$	32,500		$	42,100		$	51,400
Variable costs		22,750			37,890			41,120
Contribution margin	$	9,750		$	4,210		$	10,280
Fixed costs allocated to each product line		4,900			5,900			7,200
Operating profit (loss)	$	4,850		$	(1,690	)	$	3,080

Required:

a. Prepare a differential cost schedule.

b. Should Cotrone drop the Strawberry product line?

	Yes
	No