Nantucket Company operates tour boats. Its predicted operations for 2022 are as follows:

Sales (1,000 tours per year)	$400,000
Operating Costs:
Variable	$250 per tour
Fixed	$100,000 per year

The company has received a request to offer 100 tours for $310 each. Nantucket has plenty of capacity to do these tours in addition to its regular business. Doing these tours would not affect the companys regular sales or variable costs, but its annual fixed costs will increase by $5,000 due to an increase in its annual insurance premiums.

a. What is the effect of the decision to accept the offer on the companys operating profit?

b. Should the company accept the 100 special tours for $310 per tour?

c. If the 100 special tours offer is accepted, Nantucket will have to give up its internal plans to organize 50 whale-watching tours for $500 each. Each whale-watching tour will have a higher variable cost of $350 per whale-watching tour but with no increase in its annual insurance premiums. Should Nantucket management accept the 100 special tours at $310 per tour or go with the 50 whale-watching tours at $500 per tour? Show your computations to support your decision.