Answer: 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 <u>- 128000</u>
contribution margin <u>163840</u>
* 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
