Classic Limo, Inc., provides limousine service to Tri-Cities airport. The price of the service is fixed at a flat rate for each trip and most costs of providing service are stable for each trip. Marc Pence, the owner, budgets income by estimating two factors that fluctuate with the economy: the fuel cost associated with each trip and the number of customers who will take trips. Looking at next year, Marc develops the following estimates of contribution margin (price less variable cost of the trip, including fuel) and for the estimated number of customers. Although Marc understands that it is not strictly true, he assumes that the cost of fuel and the number of customers are independent. Scenario Excellent Fair Poor Contribution Margin per Ride (Price Variable cost) $40 25 Number of Customers 10,500 6,000 4,500 15 In addition to the costs of a ride, Marc estimates that other service costs are $50,000 plus $5 for each customer (ride) in excess of 6,000 rides. Annual administrative and marketing costs are estimated to be $25,000 plus 10 percent of the contribution margin. Required: Prepare an analysis of the possible operating income for Classic Limo, Inc., similar to that in Exhibit 13.15. What is the range of possible operating incomes? Total Contribution Margin Service Costs Marketing & Admin Operating Profit (Loss) 25 Poor Fair Excellent Poor Fair Excellent Poor Fair Excellent Contribution Number of Margin Customers 15 4,500 4,500 $ 40 4,500 6,000 6,000 $ 40 6,000 $ 15 10,500 $ 25 10,500 10,500 | $ $ 0 0 40