WSM Corporation, Need assistance with Req A, Req B1, Req B2 WSM Corporation is considering offering an air shuttle service between Sao Paulo and Rio de Janeiro. It plans to offer four flightsevery day (excluding certain holidays) for a total of 1,400 flights per year (= 350 days x 4 flights per day). WSM has hireddetermine activity-based costs for this operation. The consultant's report shows the following.consultant toActivity Measure (cost Unit Cost(cost per unit ofActivityFlying and maintaining aircraftServing passengersAdvertising and marketingdriver)Number of flightsNumber of passengersNumber of promotionsactivity)$ 1,300 per flight5 per passenger$48,000 per promotionWSM estimates the following annual information. With 13 advertising promotions, it will be able to generate demand for 40 passengersper flight at a fare of $190. The lease of the 60-seat aircraft will cost $3,600,000. Other equipment costs will be $1,800,000.Administrative and other marketing costs will be $1,000,000.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 driverfor flights would decrease by $100 as a result of Internet sales. Administrative and other marketing costs would increase by $1ratemillion. 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?- Assumemanaothat 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 $discount ticket, good for reservations made in advance, would sell for $145. Management estimates that it can sell 35,000C.now concider215.Atickets (25 per flight) at the unrestricted airfare of $215. 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 $1,600,000? 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.Reg AReg B1Req B2Reg CWhat annual operating income can WSM expect from this new service? (Enter your answer in thousands of dollars.)Operating income< Reg AReq B1 >

a) In question a, we will create an income statement to show the profitibility from the new service.…

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 driver rate for flights would decrease by $100 as a result of Internet sales. Administrative and other marketing costs would increase by $1 million. WSM estimates that the added convenience would generate a 5 percent increase in demand. All other costs and fares would remain 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?