Scholastic Tours Is Trying to Decide Which One of Two

Scholastic Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below: $\begin{array}{lcc}&\text { Eastern Tour}&\text { Western Tour }\\\text { Projected revenue } & \$ 8,000 & \$ 11,000 \\\text { Variable costs } & 1,000 & 6,000\\\text { Fixed costs } & \underline{4,000 }&\underline{ 4,000} \\\text { Profit } &\underline{ \$ 3,000} &\underline{ \$ 1,000}\end{array}$
What are the incremental (differential) costs of the Western Tour?

A) $3,000
B) $4,000
C) $5,000
D) None of these answers are correct.

Correct Answer:

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