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	$	33,200		$	43,400		$	51,000
Variable costs		23,240			39,060			40,800
Contribution margin	$	9,960		$	4,340		$	10,200
Fixed costs allocated to each product line		4,200			6,000			7,800
Operating profit (loss)	$	5,760		$	(1,660	)	$	2,400

Required: a. Prepare a differential cost schedule. Alternative: Difference (all lower under Status Quo Drop Strawberry the alternative) Revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profit (loss)