COST ACCOUNTING, 5ed, Chapter 4, Exercise 48, 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 companys 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 companys total fixed costs would be reduced by 20 percent.

NOTE: I have worked the problem through out except that I am stuck on and need help with the DIFFERENTIAL COST SCHEDULE TO DETERMINE Less: Fixed Cost for the decision to drop Strawberry, and the Operation profit (loss).

Status Quo

Alternative: Drop Strawberry

Difference (all lower under the alternative)

Less: Fixed costs	35,600	help?	help?
Operating profit(loss)	16,200	help?	help?