Prepare a contribution income statement if the hotels

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Reference no: EM13482506

A contribution income statement for the La Jolla Inn is shown below. (Ignore income taxes.)

Revenue

2,400,000

Less: Variable expenses

1,260,000

Contribution margin

1,140,000

Less: Fixed expenses

720,000

Net income

420,000

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 $280,000.

Reference no: EM13482506

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