WSM Corpora on s considering o ering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to o er tour n ghts every day excluding certain holidays for a otal of 1.400 n ghts per year = 350 days WSM has hired a consultant to determine activity-based costs for this operation. The consultant's report shows the following 4 nights per dav ActivityActivity Measure (cost driver) Unit Cost (cost per unit of activity) 3 1,600 per flight Flying and maintaining aircraft Serving passengers Advertising and marketin Number of flights Number of passengers Number of 60,000 WSlM estimates the following annual information. With 20 advertising promotions, it will be able to generate demand for 40 passengers per flight at a fare of S225. The lease of the 60-seat aircraft will cost $4,000.000. Other equipment costs will be $2,000,000. Administrative and other marketing costs will be $1,250,000 Required a. What annual operating income can WSM expect from this new service? (Enter your answer in thousands of dollars.) Answer is complete but not entirely correct. 1686 0000 income b-1. WSM is considering selling tickets over the Intemet to save on commissions and other costs. It is estimated that the cost driver rate for lights would decrease by $100 as a result of Internet sales. Administrative and other marketing costs would increase by $1 milion. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares would remain the same. What annual operating income can WSM expect from adopting Intemet ticket sales? (Enter your answer in thousands ot dollars rounded to 2 decimal places.) Answer is complete but not entirely correct. income1456.000 00 b-2. Would you recommend that WSM adopt Internet ticket sales? O Yes c. Assume that WSM management decides not to adopt the Internet strategy, regardless of your answer to requirement (o). Instead, It is now consicering a plan to sell tickets a two prices. An unrestricted ticket igood for travel at any time on any day) would sell for $250. A discount ticke, good tor reservations made in advance, would sell tor S150. Management estimates that t can sell 35,000 tickets (25 per tlight) at the unrestricted airfare ot $250. All other data remain the lgnoring the information in requirement (b), How many discounled tic kets would WSM have lo sell annually to earn an operating income of $1,700,000? Assume that the annual number of flights remains al 1,400 and that the discounted tickets wouid be evenly divided across the 1,400 flights 3Answer is complete but not entirely correct