show calculations and how you got the answer

a) SSILN2 Dropping or Retaining a Tour A study has indlicated that some of the bus tours operated by Clear Water Tours Inc. are not profitable, As a resull, consideration is being given to dropping these unprofitable tours to improve the companys overall operating performance. One such tour is a three-day Majestic Islands bus tour. Addilional information and an income statement from a bypleal Majestic Istands tour are given below. The following additional information is avallable about the tour: Bus divivers are pald fixed annual salaries; tour culdes are pald for each b. The "Bus malntenance and preparation" cost in the statement is an tour conducted. ellocation of the salaries of mechanics and ohier servee personnel who are responsible for keeping the company's fleet of buses in good operating condition. Ticket revenue ( 100 seat capacity X40% occupancy X c. Depreciation of buses is due to obsolescence. d. Llability insurance premlums are based on the number of buses in the company's fleet. e. Dropping the Majestic Islands bus tour would not allow Glear Water Tours to reduce the number of buses in lis fleet, the number of bus drivers on the payroll, or the size of the maintenance and preparation staff. Required: 1. Prepare an analysis showing what the Impact will be on the company's profits if this tour is discontinued. 2. The company's tour director has been criticized because only about 50% of the seats on Clear Water's tours are beling filled, compared to an Industy average of 60%. The tour director has explained that Clear Water's average seat occupancy could be improved considerably by elliminating about 10% of tis tours, but that doing so would reduce proflts. Explain how this could happen