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 the providing the 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. Contribution Margin per Ride Number of Customers Scenario Excellent Fair (Price - Variable cost) 6,000 3,400 1,800 35 25 In addition to the costs of a ride, Marc estimates that other service costs are $43,000 plus $6 for each customer (ride) in excess of 3,400 rides. Annual administrative and marketing costs are estimated to be $24,000 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 Contribution Number of Service Marketing &Operating Admin Margin Costs Profit (Loss) Customers 1,800 1,800 1,800 3,400 3,400 3,400 6,000 6,000 6,000 25 Fair 35 Excellent 25 35 Excellent 25 Fair 35 Excellent 0