2 4 points eBook Print Cotrone Beverages makes energy drinks in three flavors: Original, Strawberry, and Orange. The 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 Sales Strawberry $42,200 37,980 $ 4,220 6,100 Orange $51,400 41,120 $10,280 7,500 $ 2,780 Variable costs Original $32,700 22,890 Contribution margin References Fixed costs allocated to each product line Operating profit (loss) $ 9,810 5,000 $ 4,810 $ (1,880) Mc Graw 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.) Status Quo Alternative: Drop Strawberry Difference Revenue $ Less: Variable costs 126,300 $ 101,990 84,100 $ 64,010 42,200 37,980 decrease decrease < Prev 4 of 5 Next > Check my work 4 Contribution margin Fixed costs allocated to each product line Operating profit (loss) $ 9,810 5,000 $ 4,810 $ (1,880) $ 4,220 6,100 $10,280 7,500 $ 2,780 2 points eBook Print References 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.) Status Quo Alternative: Drop Strawberry Difference Revenue $ 126,300 $ 84,100 $ 42,200 decrease Less: Variable costs 101,990 64,010 37,980 decrease Contribution margin $ 24,310 $ 20,090 $ 4,220 decrease Less: Fixed costs 18,600 decrease Operating profit (loss) $ 5,710 decrease Check my work