Business, 07.03.2020 05:38 NREYESLDS2806

Carriage Company offers guided horse-drawn carriage rides through historic

Athens comma GeorgiaAthens, Georgia.

The carriage business is highly regulated by the city.

CranmoreCranmore

Carriage Company has the following operating costs duringApril:

During April

CranmoreCranmore

Carriage Company had

13 400

passengers.

SeventySeventy

percent of passengers were adults

($2222

fare) while

3030%

were children

($1414

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
1717%

in May. Which figures on the income statement would you expect tochange, and by what percentage would they change? Which figures would remain the same as in April?
Requirement 1. Prepare the company's contribution margin income statement for the month of April. Round all figures to the nearest dollar. (Do not round interim calculations or amounts. Round all amounts input in the table to the nearest dollar.)

Monthly depreciation expense on carriages and stable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,600

Fee paid to the City of Athens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20% of ticket revenue

Cost of souvenir set of postcards given to each passenger. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$0.85/set of postcards

Brokerage fee paid to independent ticket brokers (60% of tickets are issued through these

$1.50/ticket sold by broker

brokers; 40% are sold directly by the Cranmore Carriage Company). . . . . . . . . . . . . . . . . . . .

Monthly cost of leasing and boarding the horses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$50,000

Carriage drivers (tour guides) are paid on a per passenger basis. . . . . . . . . . . . . . . . . . . . . . . .

$3.50 per passenger

Monthly payroll costs of non-tour guide employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$7,750

Marketing, website, telephone, and other monthly fixed costs. . . . . . . . . . . . . . . . . . . . . . . . . . .

$7,350

PrintDone

Cranmore Carriage Company

Contribution Margin Income Statement

For the Month Ended April 30

Sales revenue

Less:

Variable expenses

Fee paid to city

Complimentary postcards

Brokerage fee

Carriage driver wages

Contribution margin

Less:

Fixed expenses

Leasing and boarding horses

Non-carriage driver payroll expense

Depreciation expense

Other fixed operating expenses

Operating income

Answers: 1

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Carriage Company offers guided horse-drawn carriage rides through historic

Athens comma...

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