Question

Genereux Carriage Company offers guided horse-drawn carriage rides through historic Toronto. The carriage business is highly regulated by the city. Genereux Carriage Company has the following operating costs during April: (Click the icon to view the operating costs.) During April (a month during peak season) Genereux Carriage Company had 13,300 passengers. 70% of passengers were adults ($21 fare) while 30% were children ($13 fare). Requirements 1. Prepare the company's contribution margin income statement for the month of April. Round all final figures to the nearest dollar. 2. Assume that passenger volume increases by 15% 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? Requirement 1. Prepare the company's contribution margin income statement for the month of April. (Round all interim calculations to the nearest cent and all final calculations to the nearest dollar.) Genereux Carriage Company Contribution Margin Income Statement For the Month Ended April 30 Data Table - X $ 2,200 5% of ticket revenue $0.75/set of postcards Monthly depreciation expense on carriages and stable Fee paid to Quebec City ...... Cost of souvenir set of postcards given to each passenger. Brokerage fee paid to independent ticket brokers (60% of tickets are issued through these brokers, 40% are sold directly by the Genereux Carriage Company) Monthly cost of leasing and boarding the horses Carriage drivers (tour guides) are paid on a per-passenger basis .... Monthly payroll costs of non-tour-guide employees Marketing, website, telephone, and other monthly fixed costs...... ..... $1.70/ticket sold by broker $ 47,000 $3.20 per passenger $ 9,100 $ 8,800 Print Done Operating income y would 15%. Requirement 2. Assume passenger volume increases by 15% in May. Which figures on the income statement would you expect to change, and by what percentage would they change? If passenger volume increases by 15% in May, we would expect expenses to 15%. This is because costs change in direct proportion to changes in volume. As a result, the Which figures would remain the same as in April? Assuming that a 15% increase in volume is still in the same relevant range, we would expect costs to remain at their present level.

Answer 1

Answer with working notes is given below

Req1 $247,380 As per working below Genereux Carriage Company Contribution Margin Income Statement For the month Ended April 30 Sales Less: Variable Cost Carriage Driver $42,560 Fee paid to Quebec City $12,369 Cost of Souvenir $9,975 Brokerage fees $13,566 Total Variable Cost Contribution Margin Less: Fixed Cost Depreciation on Carriage and stable $2,200 Leasing and boarding horses $47,000 payroll cost of non-tour guide employees $9,100 Marketing, website, telephone & other $8,800 Total Fixed Cost Net Profit (13,300*$3.2) 5% of Sales Revenue (13,300*$0.75) (13,300*60%*$1.7) $78,470 $168,910 $67,100 $101,8101 Working notes: Passenger percentage Total passengers Fare per passenger Total Revenue adults 70% 9,310 $21 $195,510 children Total 30% 3,990 13,300 $13 $51,870 $247,380 Req 2 If passengers volume increases by 15% in May, we would expect the variable expenses to increase 15% this is because variable costs change in direct proportion to changes in volume As a result the variable cost would increase 15% New Variable cost $90,241 Assuming that a 15% increase in volume is still the same relevant range we would expect the fixed costs to remain at their present level