Jetboat Tours Company offers guided jet boat rides on the Magnetewan River. The tour business is highly regulated by the municipal government. Jetboat Tours Company has the following operating costs during July:

During July (a month during peak season) Jetboat Tours Company had 6,440 passengers. Eighty-five percent of passengers were adults ($25 fare) while 15% were children ($15 fare).
Required:
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 8% 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?

Question

Jetboat Tours Company offers guided jet boat rides on the Magnetewan River. The tour business is highly regulated by the municipal government. Jetboat Tours Company has the following operating costs during July:

During July (a month during peak season) Jetboat Tours Company had 6,440 passengers. Eighty-five percent of passengers were adults ($25 fare) while 15% were children ($15 fare).
Required:
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 8% 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?

Quizplus · Accepted Answer

The Answer of Jetboat Tours Company offers guided jet boat rides on the Magnetewan River. The tour business is highly regulated by the municipal government. Jetboat Tours Company has the following operating costs during July:

During July (a month during peak season) Jetboat Tours Company had 6,440 passengers. Eighty-five percent of passengers were adults ($25 fare) while 15% were children ($15 fare).
Required:
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 8% 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?

Jetboat Tours Company Offers Guided Jet Boat Rides on the Magnetewan