E6-36A Prepare a contribution margin income statement (Learning Objective 6)

Hatcher Carriage Company offers guided horse-drawn carriage rides through historic Columbus, Georgia. The carriage business is highly regulated by the city. Hatcher Carriage Company has the following operating costs during April:

Monthly depreciation expense on carriages and stable....................................................................... $2,100 Fee paid to the City of Columbus......................................................................................................... 15% 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 brokers; 40% are sold directly by the Hatcher Carriage Company)..................................................
$1.50/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........................................................ $3.80 per passenger Monthly payroll costs of non–tour guide employees............................................................................ $7,500 Marketing, website, telephone, and other monthly fixed costs........................................................... $7,400 During April (a month during peak season), Hatcher Carriage Company had 13,050 passengers.
Eighty-five percent of passengers were adults ($21 fare) while 15% were children ($13 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 10% 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?