I need help with this accounting problem WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights everyday (excluding certain holidays) for a total of 1,400 flights per year (= 350 days x 4 flights per day). WSM has hired a consultant todetermine activity-based costs for this operation. The consultant's report shows the following.Activity Measure(cost driver)Number of flightsNumber of pansengersNumber of promotionsUnit Cost (cost per unitof activity)$ 2,400 per flight5 per passenger$59,000 per promotionActivityFlying and maintaining aircraftServing passengersAdvertising and marketingWSM estimates the following annual information. With 21 advertising promotions, it will be able to generate demand for 40 passengersper flight at a fare of $330. The lease of the 60-seat aircraft will cost $4,350,000. Other equipment costs will be $2,900,000.Administrative and other marketing costs will be $1,600,000.Required:a. What annual operating income can WSM expect from this new service?b-1. WSM is considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the cost driverrate for flights would decrease by $50 as a result of Internet sales. Administrative and other marketing costs would increase by $1million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares wouldremain the same. What annual operating income can WSM expect from adopting Internet ticket sales?b-2. Would you recommend that WSM adopt Internet ticket sales?c. Assume that WSM management decides not to adopt the Internet strategy, regardless of your answer to requirement (b). Instead, itis now considering a plan to sell tickets at two prices. An unrestricted ticket (good for travel at any time on any day) would sell for $355. A discount ticket, good for reservations made in advance, would sell for $180. Management estimates that it can sell 35,000tickets (25 per flight) at the unrestricted airfare of $355. All other data remain the same.Ignoring the information in requirement (b), how many discounted tickets would WSM have to sell annually to earn an operatingincome of $4,800,000? Assume that the annual number of flights remains at 1,400 and that the discounted tickets would be evenlydivided across the 1,400 flights.Complete this question by entering your answers in the tabs below.Req AReq B1Req B2Req CWSM is considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the costdriver rate for flights would decrease by $50 as a result of Internet sales. Administrative and other marketing costs wouldincrease by $1 million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All othercosts and fares would remain the same. What annual operating income can WSM expect from adopting Internet ticket sales?(Enter your answer in thousands of dollars.)Show less AOperating income WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights everyday (excluding certain holidays) for a total of 1,400 flights per year (= 350 days x 4 flights per day). WSM has hired a consultant todetermine activity-based costs for this operation. The consultant's report shows the following.Activity Measure(cost driver)Number of flightsNumber of pansengersNumber of promotionsUnit Cost (cost per unitof activity)$ 2,400 per flight$5 per passenger$59,000 per promotionActivityFlying and maintaining aircraftServing passengersAdvertising and marketingWSM estimates the following annual information. With 21 advertising promotions, it will be able to generate demand for 40 passengersper flight at a fare of $330. The lease of the 60-seat aircraft will cost $4,350,000. Other equipment costs will be $2,900,000.Administrative and other marketing costs will be $1,600,000.Required:a. What annual operating income can WSM expect from this new service?b-1. WSM is considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the cost driverrate for flights would decrease by $50 as a result of Internet sales. Administrative and other marketing costs would increase by $1million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares wouldremain the same. What annual operating income can WSM expect from adopting Internet ticket sales?b-2. Would you recommend that WSM adopt Internet ticket sales?c. Assume that WSM management decides not to adopt the Internet strategy, regardless of your answer to requirement (b). Instead, itis now considering a plan to sell tickets at two prices. An unrestricted ticket (good for travel at any time on any day) would sell for $355. A discount ticket, good for reservations made in advance, would sell for $180. Management estimates that it can sell 35,000tickets (25 per flight) at the unrestricted airfare of $355. All other data remain the same.Ignoring the information in requirement (b), how many discounted tickets would WSM have to sell annually to earn an operatingincome of $4,800,000? Assume that the annual number of flights remains at 1,400 and that the discounted tickets would be evenlydivided across the 1,400 flights.Complete this question by entering your answers in the tabs below.Req AReq B1Reg B2Req CWhat annual operating income can WSM expect from this new service? (Enter your answer in thousands of dollars.)Operating income

Name: I need help with this accounting problem WSM Corporation is considerin
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Description: I need help with this accounting problem WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights everyday (excluding certain holidays) for a total of 1,400 flights per year (

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I need help with this accounting problem WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights everyday (excluding certain holidays) for a total of 1,400 flights per year (= 350 days x 4 flights per day). WSM has hired a consultant todetermine activity-based costs for this operation. The consultant's report shows the following.Activity Measure(cost driver)Number of flightsNumber of pansengersNumber of promotionsUnit Cost (cost per unitof activity)$ 2,400 per flight5 per passenger$59,000 per promotionActivityFlying and maintaining aircraftServing passengersAdvertising and marketingWSM estimates the following annual information. With 21 advertising promotions, it will be able to generate demand for 40 passengersper flight at a fare of $330. The lease of the 60-seat aircraft will cost $4,350,000. Other equipment costs will be $2,900,000.Administrative and other marketing costs will be $1,600,000.Required:a. What annual operating income can WSM expect from this new service?b-1. WSM is considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the cost driverrate for flights would decrease by $50 as a result of Internet sales. Administrative and other marketing costs would increase by $1million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares wouldremain the same. What annual operating income can WSM expect from adopting Internet ticket sales?b-2. Would you recommend that WSM adopt Internet ticket sales?c. Assume that WSM management decides not to adopt the Internet strategy, regardless of your answer to requirement (b). Instead, itis now considering a plan to sell tickets at two prices. An unrestricted ticket (good for travel at any time on any day) would sell for $355. A discount ticket, good for reservations made in advance, would sell for $180. Management estimates that it can sell 35,000tickets (25 per flight) at the unrestricted airfare of $355. All other data remain the same.Ignoring the information in requirement (b), how many discounted tickets would WSM have to sell annually to earn an operatingincome of $4,800,000? Assume that the annual number of flights remains at 1,400 and that the discounted tickets would be evenlydivided across the 1,400 flights.Complete this question by entering your answers in the tabs below.Req AReq B1Req B2Req CWSM is considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the costdriver rate for flights would decrease by $50 as a result of Internet sales. Administrative and other marketing costs wouldincrease by $1 million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All othercosts and fares would remain the same. What annual operating income can WSM expect from adopting Internet ticket sales?(Enter your answer in thousands of dollars.)Show less AOperating income< Req AReq B2 > WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flights everyday (excluding certain holidays) for a total of 1,400 flights per year (= 350 days x 4 flights per day). WSM has hired a consultant todetermine activity-based costs for this operation. The consultant's report shows the following.Activity Measure(cost driver)Number of flightsNumber of pansengersNumber of promotionsUnit Cost (cost per unitof activity)$ 2,400 per flight$5 per passenger$59,000 per promotionActivityFlying and maintaining aircraftServing passengersAdvertising and marketingWSM estimates the following annual information. With 21 advertising promotions, it will be able to generate demand for 40 passengersper flight at a fare of $330. The lease of the 60-seat aircraft will cost $4,350,000. Other equipment costs will be $2,900,000.Administrative and other marketing costs will be $1,600,000.Required:a. What annual operating income can WSM expect from this new service?b-1. WSM is considering selling tickets over the Internet to save on commissions and other costs. It is estimated that the cost driverrate for flights would decrease by $50 as a result of Internet sales. Administrative and other marketing costs would increase by $1million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares wouldremain the same. What annual operating income can WSM expect from adopting Internet ticket sales?b-2. Would you recommend that WSM adopt Internet ticket sales?c. Assume that WSM management decides not to adopt the Internet strategy, regardless of your answer to requirement (b). Instead, itis now considering a plan to sell tickets at two prices. An unrestricted ticket (good for travel at any time on any day) would sell for $355. A discount ticket, good for reservations made in advance, would sell for $180. Management estimates that it can sell 35,000tickets (25 per flight) at the unrestricted airfare of $355. All other data remain the same.Ignoring the information in requirement (b), how many discounted tickets would WSM have to sell annually to earn an operatingincome of $4,800,000? Assume that the annual number of flights remains at 1,400 and that the discounted tickets would be evenlydivided across the 1,400 flights.Complete this question by entering your answers in the tabs below.Req AReq B1Reg B2Req CWhat annual operating income can WSM expect from this new service? (Enter your answer in thousands of dollars.)Operating income< Req AReq B1 >

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