Charleston Carriage Company offers guided horse-drawn carriage rides through historic Greenville, 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 13,400 passengers. Eighty percent of passengers were adults (\($20\) fare) while 20% were children (\($12\) fare).

Requirements:

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 19% 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?

Transcribed Image Text:

Monthly depreciation expense on carriages and stable. Fee paid to the City of Greenville Cost of souvenir set of postcards given to each passenger.. Brokerage fee paid to independent ticket brokers (60% of tickets are issued through these brokers; 40% are sold directly by the Charleston Carriage Company)... 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, website, telephone, and other monthly fixed costs. $2,900 10% of ticket revenue $0.55/set of postcards $1.40/ticket sold by broker $48,000 $3.90 per passenger $7,600 $7,350