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. 44 Inch $ 559,700 278,680 218,464 54 Inch $337,500 Revenues Variable costs Fixed costs allocated to products 36 Inch $ 358,900 224,600 140,230 Operating profit (loss) $ (5,930) $ 62,556 $ 49,194 156,500 131,806 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? Complete this question by entering your answers in the tabs below. Required A Required B 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.) Revenue Less variable costs Contribution margin Less fixed costs Operating profit Status Quo Alternative: Drop 36-Inch Fan Difference 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. 44 Inch $ 559,700 278,680 218,464 Revenues Variable costs Fixed costs allocated to products 36 Inch $ 358,900 224,600 140,230 54 Inch $ 337,500 156,500 131,806 Operating profit (loss) $ (5,930) $ 62,556 $ 49,194 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? Complete this question by entering your answers in the tabs below. Required A Required B Should Lamothe Kitchen and Bath should drop the 36-Inch model product line? Should Lamothe Kitchen and Bath should drop the 36-Inch model product line? < Required A Required >