A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) Revenue Less: Variable expenses Contribution margin Less: Fixed expenses Net income $ 2,150,000 1,160,000 $ 990,000 645,000 $ 345,000 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
A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) Revenue Less: Variable expenses Contribution margin Less: Fixed expenses Net income $ 2,150,000 1,160,000 $ 990,000 645,000 $ 345,000 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
![A contribution income statement for the
Nantucket Inn is shown below. (Ignore
income taxes.)
Revenue
Less: Variable
expenses
Contribution margin
Less: Fixed expenses
Net income
$ 2,150,000
1,160,000
$ 990,000
645,000
$ 345,000
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 $230,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe15b8af0-27e1-4c12-b293-7f8d2f41b828%2Fab1f12be-4276-4320-9a7b-553c55a3b9e2%2Fcd5a5o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A contribution income statement for the
Nantucket Inn is shown below. (Ignore
income taxes.)
Revenue
Less: Variable
expenses
Contribution margin
Less: Fixed expenses
Net income
$ 2,150,000
1,160,000
$ 990,000
645,000
$ 345,000
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 $230,000.
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