Prepare a contribution margin income statement (Learning Objective 6)

Charleston Carriage Company offers guided horse-drawn carriage rides through historic Charleston, South Carolina. The carriage business is highly regulated by the city. Charleston Carriage Company has the following operating costs during April:

During April (a month during peak season) Charleston Carriage Company had 12,960 passengers. Eighty-five percent ( \(85 \%\) ) of passengers were adults ( \(\$ 20\) fare) while \(15 \%\) were children ( \(\$ 12\) fare).
1. Prepare the company's contribution margin income statement for the month of April. Round all figures to the nearest dollar.
2. Assume that passenger volume increases by \(10 \%\) in May. Which figures on the income statement would you expect to change, and by what percentage would they change? Which figures would remain the same as in April?

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Monthly depreciation expense on carriages and stable. $2,000 Fee paid to the City of Charleston... 15% of ticket revenue Cost of souvenir set of postcards given to each passenger $0.50/set of postcards Brokerage fee paid to independent ticket brokers (60% of tickets are issued through these brokers; 40% are sold directly by the Charleston Carriage Company)...... $1.00/ticket sold by broker Monthly cost of leasing and boarding the horses... Carriage drivers (tour guides) are paid on a per passenger basis. Monthly payroll costs of non-tour guide employees. Marketing, Web site, telephone, and other monthly fixed costs. 45,000 $3.00 per passenger $7,500 $7,000