Vintage Carriage Company offers guided horse-drawn carriage rides through historic Camden, South Carolina. The carriage business is highly regulated by the city. Vintage Carriage Company has the following operating costs during April:
Monthly depreciation expense on carriages and stable ........................................................$2,300
Fee paid to the City of Camden .................................................................. 10% of ticket revenue
Cost of souvenir set of postcards given to each passenger .......................... $0.75/set of postcards
Brokerage fee paid to independent ticket brokers (60% of tickets
are issued through these brokers; 40% are sold directly by the
Vintage Carriage Company) ................................................................ $1.50/ticket sold by broker
Monthly cost of leasing and boarding the horses .............................................................. $49,000
Carriage drivers (tour guides) are paid on a per passenger basis .................... $3.90 per passenger
Monthly payroll costs of non-tour guide employees ........................................................... $7,900
Marketing, website, telephone, and other monthly fixed costs ........................................... $7,200
During April (a month during peak season), Vintage Carriage Company had 13,500 passengers.
Eighty percent of passengers were adults ($26 fare) while 20% were children ($18 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 18% 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?