Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Charleston Carriage Company offers guided horse-drawn carriage rides through historic Charleston, South Carolina. The company shut down in 2020 because of the Covid virus, but

image text in transcribedimage text in transcribed

Charleston Carriage Company offers guided horse-drawn carriage rides through historic Charleston, South Carolina. The company shut down in 2020 because of the Covid virus, but it hopes to resume business later this spring. The carriage business is highly regulated by the city, and the expected fare for all passengers is $22.00. The company budgets the following monthly operating costs for this year: Fee paid to the city of Charleston 13% of ticket revenue Cost of souvenir set of postcards given to each passenger $0.50 per set Monthly cost of leasing and boarding the horses $44,000 Carriage drivers (tour guides) are paid on a per-passenger basis $2.80 per passenger Monthly payroll costs of non tour guide employees $8,500 Marketing, web-site, telephone, and other monthly fixed costs $7,000 In addition to these costs, Charleston Carriage will have to pay a brokerage fee of $0.90 per ticket sold by brokers. On average, 65% of all tickets sold are sold by brokers; 35% are sold directly by Charleston Carriage. Charleston Carriage has several questions about its expected monthly revenues, costs, and profits in 2022. 7. Charleston Carriage has an opportunity to negotiate with the company that leases and boards the horses. If Charleston expects to sell 4,902 tickets per month in 2022 and wants to break even each month, what's the most it could pay per month to lease and board the horses (ignoring taxes)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using Financial Accounting Information The Alternative to Debits and Credits

Authors: Gary A. Porter, Curtis L. Norton

7th Edition

978-0-538-4527, 0-538-45274-9, 978-1133161646

Students also viewed these Accounting questions