Which figures on income statement would you expect to change

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Problem

Carriage Company offers guided horse-drawn carriage rides through historic Dalton, Georgia. The carriage business is highly regulated by the city. Counton Carriage Company has the following operating costs during April: (See Attachment). During April (a month during peak season), Counton Carriage Company had 13,500 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 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?

Monthly depreciation expense on carriages and stable

$2,200

Fee paid to the City of Dalton

15% of ticket revenue

Cost of souvenir set of postcards given to each passenger

$0.60/set of postcards

Brokerage fee paid to independent ticket brokers (60% of tickets are issued through these brokers; 40% are sold directly by the Counton Carriage Company)

$1.90/ticket sold by broker

Monthly cost of leasing and boarding the horses

54,000

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

$3.90 per passenger

Monthly payroll costs of non-tour guide employees

7,550

Marketing, website, telephone, and other monthly fixed costs

7,250

Reference no: EM131795346

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