Counton Carriage Company offers guided horse-drawn carriage rides through historic Anderson comma South Carolina. The carriage business is highly regulated by the city. Counton Carriage Company has the following operating costs during April: LOADING...(Click the icon to view the information.) During April (a month during peak season), Counton Carriage Company had 12 comma 800 passengers. Sixty percent of passengers were adults ($26 fare) while 40% 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 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?

please refer to the explanation section

Explanation:

The question is incomplete the Variable costs were not given in the question.  contribution margin income statement requires variable costs to be subtracted from sales to arrive at a contribution margin. We will assume variable costs per unit were $ 10 for each horse drawn carriage rides in order to be able to prepare a contribution Margin income statement properly.

1. Contribution Margin Income Statement

*Sales                         291840

**variable costs           - 128000

contribution margin    163840

* sales from adults = (12800 x 60%) x $26 = 7680 x 26 = 199680

  sales from childrens = (12800 x 40%) x $18 = 92160

total revenue = 199680 + 921840 = $ 291840

* Variable costs = 12800 x $10 = $128000

2. Effects of a 10 rise in volume (number of passengers)

when the number of passengers rise by 10%, Sales, Variable costs and contribution margin will be affected. Contribution margin will be affected because a change in sales or variable costs directly causes a change in the contribution margin.

Sales will increase by 10%

variable costs will increase by 10%

contribution margin will increase by 10%.

Figures that would remain the same in April

Fixed costs will remain the same regardless of the number of passengers in a month

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