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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
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 $19.50. The company budgets the following monthly operating costs for this year: Fee paid to the city of Charleston Cost of souvenir set of postcards given to each passenger 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 17% of ticket revenue $0.50 per set $41,000 $3.00 per passenger $7,500 $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. REQUIRED [ROUND YOUR ANSWER TO PART A, QUESTION 1 TO TWO DECIMAL PLACES.] Part A [6 tries; 8 points] 1. What is the estimated monthly contribution margin per passenger for Charleston Carriage in 2022? 2. What are the estimated total monthly fixed costs for Charleston Carriage in 2022? Tries 0/5
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