Lamothe Kitchen and Bath makes products for the home, which it sells through major retailers and remodeling $($do$-$it$-$yourself, or DIY$)$ outlets. One product that has had varying success is a ceiling fan for the kitchen. The fan comes in three sizes $(36-$Inch, $44-$Inch, and $54-$Inch$),$ which are designed for various kitchen sizes and cooling requirements. The chief financial officer $($CFO$)$ at Lamothe has been looking at the segmented income statement for the fan and is concerned about the results for the $36-$inch model.

$36$ Inch $44$ Inch $54$ Inch

Revenues $ $376,000$ $ $578,600$ $ $356,400$

Variable costs $233,600287,680165,500$

Fixed costs allocated to products $149,230227,464140,806$

Operating profit $($loss$)$ $ $(6,830)$ $ $63,456$ $ $50,094$

If the $36-$Inch model 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 $25$ percent.

Required:

a$.$ Prepare a differential cost schedule to support your recommendation.

b$.$ Should Lamothe Kitchen and Bath should drop the $36-$Inch model product line?

Prepare a differential cost schedule to support your recommendation. $($Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect.$)$

$\backslash$table$[[,$Status Quo,$\backslash$table$[[$Alternative:$],[$Drop$],[36-$Inch Fan$]],$Difference,$],[$Revenue$,,,,$none$],[$Less variable costs,,,,$],[$Contribution margin,,,,$],[$Less fixed costs,,,,$]]$