I am having problems with this assignment the adding of tabs and the excell having been very hard can you help? I just did not know how to add a tab as required for this assignment. Chapter ; 12 ll applicable problems are available with McGraw-Hill?s Connect? Accounting . PROBLEM 12?18 Dropping or Retaining a Tour [LO2] Blueline Tours, Inc., operates tours throughout the United States. A study has indicated that some of the tours are not profitable, and consideration is being given to dropping these 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. An income statement from a typical Historic Mansions tour is given below: Ticket revenue (100 seat capacity 40% occupancy $75 ticket price per person) . . . . . . . . . . . . . . . . . . . . . . . . $3,000 100% Variable expenses ($22.50 per person) . . . . . . . . . . . . . . . . . 900 30 Contribution margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,100 70% Tour expenses: Tour promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600 Salary of bus driver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350 Fee, tour guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 Fuel for bus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Depreciation of bus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 Liability insurance, bus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Overnight parking fee, bus . . . . . . . . . . . . . . . . . . . . . . . . . 50 Room and meals, bus driver and tour guide . . . . . . . . . . . 175 Bus maintenance and preparation . . . . . . . . . . . . . . . . . . . 300 Total tour expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,950 Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (850) Differential Analysis: The Key to Decision Making 565 As mentioned above, instead of being sold as is, the T-bone steaks could be further processed into filet mignon and New York cut steaks. Cutting one side of a T-bone steak provides the filet mignon, and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6-ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste. The cost of processing the T-bone steaks into these cuts is $0.20 per pound. The filet mignon can be sold for $3.60 per pound, and the New York cut can be sold wholesale for $2.90 per pound. Required: 1. Determine the profit per pound from processing the T-bone steaks further into filet mignon and New York cut steaks. 2. Would you recommend that the T-bone steaks be sold as is or processed further? Why? The additional problem is the one that I suppose to open a new tab Chapter 11, All applicable cases are available with McGraw-Hill?s Connect? Accounting . CASE 11A?7 Transfer Pricing; Divisional Performance [LO5] Stanco, Inc., is a decentralized organization with five divisions. The company?s Electronics Division produces a variety of electronics items, including an XL5 circuit board. The division (which is operating at capacity) sells the XL5 circuit board to regular customers for $12.50 each. The circuit boards have a variable production cost of $8.25 each. The company?s Clock Division has asked the Electronics Division to supply it with a large quantity of XL5 circuit boards for only $9 each. The Clock Division, which is operating at only 60% of capacity, will put the circuit boards into a timing device that it will produce and sell to a large oven manufacturer. The cost of the timing device being manufactured by the Clock Division follows: XL5 circuit board (desired cost) . . . . . . . . . . . . . . . . . $ 9.00 Other purchased parts (from outside vendors) . . . . . 30.00 Other variable costs . . . . . . . . . . . . . . . . . . . . . . . . . . 20.75 Fixed overhead and administrative costs . . . . . . . . . . 10.00 Total cost per timing device . . . . . . . . . . . . . . . . . . . . $69.75 The manager of the Clock Division feels that she can?t quote a price greater than $70 per timing device to the oven manufacturer if her division is to get the job. As shown above, in order to keep the price at $70 or less, she can?t pay more than $9 per unit to the Electronics Division for the XL5 circuit boards. Although the $9 price for the XL5 circuit boards represents a substantial discount from the normal $12.50 price, she feels that the price concession is necessary for her division to get the oven manufacturer contract and thereby keep its core of highly trained people. The company uses return on investment (ROI) to measure divisional performance. Required: 1. Assume that you are the manager of the Electronics Division. Would you recommend that your division supply the XL5 circuit boards to the Clock Division for $9 each as requested? Why or why not? Show all computations. 2. Would it be profitable for the company as a whole for the Electronics Division to supply the Clock Division with the circuit boards for $9 each? Explain your answer. 3. In principle, should it be possible for the two managers to agree to a transfer price in this particular situation? If so, within what range would that transfer price lie? 4. Discuss the organizational and manager behavior problems, if any, inherent in this situation. What would you advise the company?s president to do in this situation? (CMA, adapted)

Student Name: Class: Problem 12-18 1. BLUELINE TOURS, INC. Analysis of Discontinuing Tour Contribution margin lost if the tour is discontinued Less tour costs that can be avoided if the tour is discontinued: Net decrease in profits if the tour is discontinued BLUELINE TOURS, INC. Alternative Analysis of Discontinuing Tour Ticket revenue Less variable expenses Contribution margin Less tour expenses: Tour promotion Salary of bus driver Fee, tour guide Fuel for bus Depreciation of bus Liability insurance, bus Overnight parking fees, bus Room & meals, bus driver and tour guide Bus maintenance and preparation Total tour expenses Net operating loss Keep the Tour $3,000 900 $2,100 $600 350 700 125 450 200 50 175 300 2,950 $(850) Drop the Tour Difference: Net Operating Income Increase or (Decrease) Given Data P12-18: BLUELINE TOURS, INC. Seat capacity Occupancy Ticket price Ticket revenue Variable expenses 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 guide Bus maintenance and preparation Total tour expenses Net operating loss 100 40% $75 $3,000 900 2,100 $600 350 700 125 450 200 50 175 300 2,950 $(850) 100.0% 30.0% 70.0% Exercise 11-7