Centennial Tours is trying to decide which one of two tours it will introduce. The costs and revenues associated with each alternative are listed below:
|
|
Tour A
|
Tour B
|
|
Projected revenue
|
$7,000
|
$11,000
|
|
Variable costs
|
1,000
|
6,000
|
|
Fixed costs
|
3,000
|
3,000
|
|
Profit
|
$3,000
|
$1,000
|
What are the incremental (differential) costs of Tour B?