A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) Revenue $ 2,250,000 Less: V

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A contribution income statement for the Nantucket Inn is shown
below. (Ignore income taxes.)
Revenue
$
2,250,000
Less: Variable expenses
1,200,000
Contribution margin
$
1,050,000
Less: Fixed expenses
675,000
Net income
$
375,000
Required:
1. Prepare a contribution income statement if
the hotel’s volume of activity increases by 25 percent, and fixed
expenses increase by 50 percent.
2. Prepare a contribution income statement if
the ratio of variable expenses to revenue doubles. There is no
change in the hotel’s volume of activity. Fixed expenses decline by
$250,000.