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I need help with the bottom portion of the problem. Thank you. BLUELINE TOURS, INC. Analysis of Discontinuing Tour $ (2,100) Contribution margin lost if
I need help with the bottom portion of the problem. Thank you.
BLUELINE TOURS, INC. Analysis of Discontinuing Tour $ (2,100) Contribution margin lost if the tour is discontinued Less tour costs that can be avoided if the tour is discontinued Tour promotion Fee tour guide Fuel Overnight parking Room, meals, bus driver, and tour guide Net decrease in profits if the tour is discontinued 600 700 125 50 175 $ 1,650 (450) Correct! BLUELINE TOURS, INC. Alternative Analysis of Discontinuing Tour Drop the Tour Difference: Net Operating Income Increase or (Decrease) Keep the Tour 3,000 900 2,100 ca 600 350 700 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 200 50 175 300 2,950 (850) 2,93 $Step by Step Solution
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