Bella Tours, Inc., operates tours throughout the United States. Consideration is being given to dropping some tours to improve the company's overall operating performance. One such tour is a two-day Historic Mansions bus tour conducted in the southern states. The following information is available about the tour: I I Bus drivers are paid fixed annual salaries; tour guides are paid for each tour conducted. The "bus maintenance and preparation" cost above is an allocation of the salaries of mechanics and other service personnel who are responsible for keeping the company's fleet of buses in good operating condition. Liability insurance premiums are based on the number of buses in the company's fleet. Dropping the Historic Mansions bus tour would not allow Bella Tours to reduce the number of buses in its fleet, the number of bus drivers on its payroll, or the size of the maintenance and preparation staff. Ticket revenue (100 seat capacity x 40% occupancy x $75 ticket price per person) Variable expenses ($22.50 per person) Contribution margin Tour expenses: Tour promotion Salary of bus driver Fee, tour guide Fuel for bus Depreciation of bus Liability insurance, bus Overnight parking fee, bus Room and meals, bus driver and tour Bus maintenance and preparation Total tour expenses $3,000 900 $2,100 $2,950 $ (850) Prepare an analysis showing what the impact will be on company profits if this tour is discontinued. Net operating loss $ 600 350 700 125 450 200 50 175 300

Bella Tours, Inc., operates tours throughout the United States. Consideration is being given to dropping some tours to improve the company's overall operating performance. One such tour is a two-day Historic Mansions bus tour conducted in the southern states. The following information is available about the tour: - Bus drivers are paid fixed annual salaries; tour guides are paid for each tour conducted. - The "bus maintenance and preparation" cost above is an allocation of the salaries of mechanics and other service personnel who are responsible for keeping the company's fleet of buses in good operating condition. - Liability insurance premiums are based on the number of buses in the company's fleet. - Dropping the Historic Mansions bus tour would not allow Bella Tours to reduce the number of buses in its fleet, the number of bus drivers on its payroll, or the size of the maintenance and preparation staff. Prepare an analysis showing what the impact will be on company profits if this tour is discontinued. Bella Tours, Inc., operates tours throughout the United States. Consideration is being given to dropping some tours to improve the company's overall operating performance. One such tour is a two-day Historic Mansions bus tour conducted in the southern states. The following information is available about the tour: - Bus drivers are paid fixed annual salaries; tour guides are paid for each tour conducted. - The "bus maintenance and preparation" cost above is an allocation of the salaries of mechanics and other service personnel who are responsible for keeping the company's fleet of buses in good operating condition. - Liability insurance premiums are based on the number of buses in the company's fleet. - Dropping the Historic Mansions bus tour would not allow Bella Tours to reduce the number of buses in its fleet, the number of bus drivers on its payroll, or the size of the maintenance and preparation staff. Prepare an analysis showing what the impact will be on company profits if this tour is discontinued