The attraction has four types of customers. Full-price, member, promotional discount, and complimentary. Prices Full-price 19.95 Discount 20% off Member Twice the price but visit an average of 5 times per year Comp Some visitors come in on a complimentary ticket Attendance Total annual attendance is 1 million people. Only 15% pay full price and 15% get in for free. In the year of operation, the attraction will sell 40,000 annual passes (remember each pass is equal to 5 visits). The rest of the attendance comes in on a promotion.

Other revenue The food sold at the attraction brings in $10 per cap and has a 30% cost of sales. Expenses Labor is 100 salaried people at $40,000 each. Hourly labor – labor hours per attendee is .80. Use this to compute hourly labor hours. The average hourly rate is $10 per hour. Operating expenses are $500,000 fixed and $2 per cap variable. Marketing costs are $100,000 for the first 500,000 visitors and $1 per cap after that. DT&I (Depreciation, taxes and insurance) is $1 million per year.

QUESTION

1. Create an income statement in contribution margin format for this tourist attraction.