Part l: Problem C (special offer) Ocean View Company operates tour boats. Its predicted operations for the year are as follows: Sales (1,000 tours per year) $400,000 Costs: Variable $250 per tour Fixed $100,000 per year The company has received a request to offer 100 tours for $300 each. Ocean View has plenty of capacity to do these tours in addition to its regular business. Doing these tours would not affect the company's regular sales or its fixed costs. a. Should the company do the special tours for $300 per tour? b. What is the effect of the decision on the company's operating profit? Problem D (eliminate department) Following are sales and other operating data for the three products made and sold by Ranger Company: Product Sales S 600,000 S 300,000 S200,000 $1,100,000 Manufacturing costs: Fixed $60,000 Variable 280,000 Selling and administrative expenses Fixed 20,000 Variable 40,000 Total costs S 400,000 S 202000 882,000 Net income $ 200,000 20,000 (2,000) 218,000 S 20,000 $60,000 $140,000 220,000 100,000 600,000 20,000 12,000 20.000 30,000 52,000 90,000 In view of the net loss for Product C, Ranger's management is considering dropping that product. All variable costs are direct costs and would be eliminated if Product C were dropped. Fixed costs are indirect costs; no fixed costs would be eliminated. Assume that the space used to produce Product C would be left idle. Would you recommend the elimination of Product C? Give supporting computations