For E6-20A Forecast costs at different volumes (Learning Obiectives 1 & 2) worth Drycleaners has capacity to clean up to 7,500 garments per month. Farnsworth Dn Requirements complete the following schedule for the three volumes shown. 4,500 Garments 6,000 Garments 7,500 Garments $4,200 Total variable costs Total fixed costs Total operating costs Variable cost per garment Fixed cost per garment Average cost per garment $2.40 2. Why does the average cost per garment change? 3. Suppose the owner, Dustin Farnsworth, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 4,500 garments. Would he overesti- mate or underestimate his total costs? By how much? E6-21A Prepare income statement in two formats (Learning Objective 6) Refer to the Farnsworth Drycleaners in E6-20A. Assume that Farnsworth charges custom- ers $10 per garment for dry cleaning. Prepare Farnsworth's projected income statement if 4,260 garments are cleaned in July. First, prepare the income statement using the tradi- tional format; then prepare Farnsworth's contribution margin income statement. ...tellarninn hiertive 2) 6,000 Garments 6.41B Forecast costs at different volumes (Learning Objectives 1 & 2) Whitman Drycleaners has the capacity to clean up to 6,000 garments per month Requirements 1. Complets the following schedule for the three volumes shown. 3,000 Garments 4,500 Garments Total variable costs $3,375 Total fixed costs Total operating costs Variable cost per garment Fixed cost per garment $2.40 Average cost per garment 2. Why does the average cost per garment change? 3. The owner, Ellen Whitman, uses the average cost per unit at full capacity to predict total costs at a volume of 3,000 garments. Would she overestimate or underestimate total costs? By how much? E6-42B Prepare income statement in two formats (Learning Objective 6) Refer to the Whitman Drycleaners in E6-41B. Assume that Whitman charges customers 59 per garment for dry cleaning. Prepare Whitman's projected income statement if 4,220 garments are cleaned in March. First, prepare the income statement using the traditional format; then prepare Whitman's contribution margin income statement. Ch.37A Prepare a contribution margin income statement (Learning Objective 6) Charleston Carriage Company offers guided horse-drawn carriage rides through historic Greenville, Soute Carolina. The carriage business is highly regulated by the city. Charles- ton Carriage Company has the following operating costs during April: Monthly depriation expense on carriages and stable ......... $2,900 Fee paid to the City of Greenville. 10% of ticket revenue Cost of souvenir set of postcards given to each passenger .......... $0.55/set of postcards Brokerage fee paid to independent ticket brokers (60% of tickets are issued through these brokers; 40% are sold directly by the Charleston Carriage Company)........ $1.40/ticket sold by broker Monthly cost of leasing and boarding the horses ......... $48,000 Carriage drivers (tour guides) are paid on a per passenger basis ............... $3.90 per passenger $7,600 Monthly payroll costs of non-tour guide employees.... Marketing, website, telephone, and other monthly fixed costs........ .. $7,350 During April (a month during peak season), Charleston Carriage Company had 13,400 passengers. Eighty percent of passengers were adults ($20 fare) while 20% were children ($12 fare). 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 19% 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