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Student Name: Class: Problem 12-18 1. BLUELINE TOURS, INC. Analysis of Discontinuing Tour Contribution margin lost if the tour is discontinued Less...

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Student Name: Class: Problem 12-18 1. BLUELINE TOURS, INC. Analysis of Discontinuing Tour Contribution margin lost if the tour is discontinued Less tour costs that can be avoided if the tour is discontinued: Net decrease in profits if the tour is discontinued BLUELINE TOURS, INC. Alternative Analysis of Discontinuing Tour Difference: Net Operating Keep Drop Income the the Increase or Tour Tour (Decrease) Ticket revenue $3,000 Less variable expenses 900 Contribution margin $2,100 Less tour expenses: Tour promotion $600 Salary of bus driver 350 Fee, tour guide 700 Fuel for bus 125 Depreciation of bus 450 Liability insurance, bus 200 Overnight parking fees, bus 50 Room & meals, bus driver and tour guide 175 Bus maintenance and preparation 300 Total tour expenses 2,950 Net operating loss $(850)
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Given Data P12-18: BLUELINE TOURS, INC. Seat capacity 100 Occupancy 40% Ticket price $75 Ticket revenue $3,000 100.0% Variable expenses 900 30.0% Contribution margin 2,100 70.0% Tour expenses: Tour promotion $600 Salary of bus driver 350 Fee, tour guide 700 Fuel for bus 125 Depreciation of bus 450 Liability insurance, bus 200 Overnight parking fee, bus 50 Room and meals, bus driver and tour guide 175 Bus maintenance and preparation 300 Total tour expenses 2,950 Net operating loss $(850)
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