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

Required:

Show the hotel's cost structure by indicating the percentage of the hotel's revenue represented by each item on the income

statement.

Suppose the hotel's revenue declines by $20$ percent. Use the contribution$-$margin percentage to calculate the resulting decrease in

net income.

What is the hotel's operating leverage factor when revenue is $$1,750,000?$

Use the operating leverage factor to calculate the increase in net income resulting from a $25$ percent increase in sales revenue.