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..... Fee paid to the City of Charleston.......... Cost of souvenir set of postcards given to each passenger Brokerage fee paid to independent ticket brokers (60% of tickets are issued $2,000 15% of ticket revenue $0.50/set of postcards through these brokers; 40% are sold directly by the Charleston Carriage Company)....... $1.00/ticket sold by broker $45,000 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. $3.00 per passenger $7,500 $7,000