Exercise 4-50 (Algo) Dropping Product Lines (LO 4-4) Freeflight Airlines is presently operating at 70 percent of capacity. Management of the airline is considering dropping Freelight routes between Europe and the United States. If these routes are dropped, the revenue associated with the routes would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by 20 percent Segmented income statements for a typical month appear as follows (all amounts in millions of dollars) Within Between U.S. and Europe Sales $ 2.89 Variable costs Fixed costs allocated to routes Operating profit (loss) $(0.17 Routes Within 0.5. $3.29 1.26 Europe 52.84 0.91 1.25 $0.68 1.62 1.71 1.35 $0.43 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. Enter your answers in millions rounded to 2 decimal places.) Status Quo Alternative: Drop U.S. to Europe Difference Library Below Athere 26 Help Save & Ext Sub Required: a. Prepare a differential cost schedule (Select option "increase" or "decrease" keeping Status Quo as the base. Select "none" there is no effect. Enter your answers in millions rounded to 2 decimal places.) Status Quo Alternative: Drop U.S. to Europe Difference Revenue Les Variable costs Contribution margin Less Fixed costs Operating profit (6)