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

Revenue	$	2,250,000
Less: Variable expenses		1,200,000
Contribution margin	$	1,050,000
Less: Fixed expenses		675,000
Net income	$	375,000

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 $250,000.