ASA Tours operates a network of offices around the globe specializing in local tours given by...

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ASA Tours operates a network of offices around the globe specializing in local tours given by local residents and academics. Depending on the year, it operates at between 60 and 70 percent of capacity, which consists of locals who meet the criteria required by ASA. ASA operates three types of tours. Web-based tours consist of live-stream broadcasts with a limit of 15 participants. Group tours consist of small groups of no more than eight people. Finally, there are individual tours, which are personalized tours for no more than six people. Segmented Income statements for a typical month appear as follows: Group $ 279,600 218,800 91,092 Routes Sales Web-Based Variable costs Fixed costs allocated to tours $ 111,800 25,600 37,396 Operating profit (loss) $ 48,804 $ (30,292) Individual $ 185,600 103,800 61,012 $ 20,788 ASA is considering dropping the group tours. If these tours are dropped, the revenue associated with the tours would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by 35 percent. Required: a-1. Prepare a differential cost schedule. a-2. Should ASA Tours drop the group tours? b. Are there other factors you would recommend ASA Tours consider before making the decision? Required a 1 Required a 2 Required b Prepare a differential cost schedule. Note: Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect. Status Quo Alternative: Drop Group Tours Difference Revenue $ 577,000 $ 297,400 $ (279,600) Less: Variable costs 348,200 129,400 (218,800) Contribution margin Less: Fixed costs 189,500 123,175 (66,325) Operating profit (loss) $ 39,300 $ 44,825 $ 5,525 ASA Tours operates a network of offices around the globe specializing in local tours given by local residents and academics. Depending on the year, it operates at between 60 and 70 percent of capacity, which consists of locals who meet the criteria required by ASA. ASA operates three types of tours. Web-based tours consist of live-stream broadcasts with a limit of 15 participants. Group tours consist of small groups of no more than eight people. Finally, there are individual tours, which are personalized tours for no more than six people. Segmented Income statements for a typical month appear as follows: Group $ 279,600 218,800 91,092 Routes Sales Web-Based Variable costs Fixed costs allocated to tours $ 111,800 25,600 37,396 Operating profit (loss) $ 48,804 $ (30,292) Individual $ 185,600 103,800 61,012 $ 20,788 ASA is considering dropping the group tours. If these tours are dropped, the revenue associated with the tours would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by 35 percent. Required: a-1. Prepare a differential cost schedule. a-2. Should ASA Tours drop the group tours? b. Are there other factors you would recommend ASA Tours consider before making the decision? Required a 1 Required a 2 Required b Prepare a differential cost schedule. Note: Select option "increase" or "decrease", keeping Status Quo as the base. Select "none" if there is no effect. Status Quo Alternative: Drop Group Tours Difference Revenue $ 577,000 $ 297,400 $ (279,600) Less: Variable costs 348,200 129,400 (218,800) Contribution margin Less: Fixed costs 189,500 123,175 (66,325) Operating profit (loss) $ 39,300 $ 44,825 $ 5,525