Freeflight Airlines is presently operating at 70 percent of capacity. Management of the airline is considering dropping FreeFlights 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 companys total fixed costs would be reduced by 20 percent.

Segmented income statements for a typical monthappear as follows (all amounts in millions of dollars):

Routes Within Within Between U.S.

U.S. Europe and Europe

Sales $3.28 $2.89 $2.94

Variable Cost $1.38 $0.91 $1.39

Fixed Costs allocating

to routes $1.65 $1.29 $1.39

Operating

profit (loss) $0.25 $0.69 $(0.16)

Required:

a. Prepare a differential cost schedule. ( Select option increase or decrease, keeping Starus Quo as the base. Select none if there is no effect. Enter your answers in millions rounded to 2 decimal places).