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

Revenue	$	1,800,000
Less: Variable expenses		1,020,000
Contribution margin	$	780,000
Less: Fixed expenses		540,000
Net income	$	240,000

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 $160,000.