54) Waterfront Tours Company offers guided mini-bus tours through downtown Toronto. The tour business is highly regulated by the city. Waterfront Tours Company has the following operating costs during July:
Monthly depreciation expense on non-automotive equipment$5,250
Fee paid to the City of Toronto12% of ticket revenue
Cost of souvenir set of postcards given to each passenger $1.00/set of postcards
Brokerage fee paid to independent ticket brokers:
(70% of tickets are issued through these brokers; 30% are sold
directly by the Waterfront Tours Company) $1.25/ticket sold by broker
Monthly cost of leasing automotive equipment$76,000
Bus drivers (tour guides) are paid on a per passenger basis$5.00 per passenger
Monthly payroll costs of non—tour guide employees$12,375
Marketing, website, telephone, and other monthly fixed costs.$14,500
During July (a month during peak season) Waterfront Tours Company had 28,020 passengers. Eighty-five percent of passengers were adults ($30 fare) while 15% were children ($20 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 15% in August. 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 July?