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

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 18% 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 Camden. 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 Vintage Carriage Company)... Monthly cost of leasing and boarding the horse........... 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. $2,300 10% of ticket revenue $0.75/set of postcards $1.50/ticket sold by broker $49,000 $3.90 per passenger $7,900 $7,200