A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) ...
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Accounting
A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.)
Revenue
$
2,150,000
Less: Variable expenses
1,160,000
Contribution margin
$
990,000
Less: Fixed expenses
645,000
Net income
$
345,000
Required:1. Prepare a contribution income statement if the hotels 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 hotels volume of activity. Fixed expenses decline by $230,000.
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