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A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) Less: Variable expenses Contribution margin Less: Fixed expenses Net income $1,700,00

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A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) Less: Variable expenses Contribution margin Less: Fixed expenses Net income $1,700,00 1,088, $ 612,600 510.000 $ 102,000 Required: 1. Show the hotel's cost structure by indicating the percentage of the hotel's revenue represented by each item on the income statement 2. Suppose the hotel's revenue declines by 20 percent. Use the contribution-margin percentage to calculate the resulting decrease in net income 3. What is the hotel's operating leverage factor when revenue is $1,700,000? 4. Use the operating leverage factor to calculate the increase in net income resulting from a 25 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Show the hotel's cost structure by indicating the percentage of the hotel's revenue represented by each item on the income statement NANTUCKET INN Contribution Income Statement Amount 1700,000 Percent Revenue Required: 1. Show the hotel's cost structure by indicating the percentage of the hotel's revenue represented by each item on the income statement 2. Suppose the hotel's revenue declines by 20 percent. Use the contribution-margin percentage to calculate the resulting decrease in net income. 3. What is the hotel's operating leverage factor when revenue is $1,700,000? 4. Use the operating leverage factor to calculate the increase in net income resulting from a 25 percent increase in sales revenue. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Show the hotel's cost structure by indicating the percentage of the hotel's revenue represented by each item on the income statement Percent % NANTUCKET INN Contribution Income Statement Amount Revenue $ 1.700,000 Variable expenses 1,088.000 Contribution margin 612,000 Fixed expenses 510,000 Net income 102.000 0% 0%

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