Refer to the data given in Exercise 18.29.
In E18.29 A contribution margin statement for Pavlova Lodge is shown below. (Ignore income taxes.)

Required:
Prepare a new contribution margin statement for Pavlova Lodge in each of the following independent situations (ignore income taxes):
1. The hotel's volume of sales increases by 25 percent, and fixed costs increase by 40 percent.
2. The ratio of variable costs to revenue doubles. There is no change in the hotel's volume of sales. Fixed costs decline by $100 000.

Transcribed Image Text:

$1 500 000 Revenue Variable costs Contribution margin Fixed costs 900 000 $ 600 000 450 000 $ 150 000 Net profit