Required Information [The following Information applies to the questions displayed below.] Vernon Cabins is a small motel chain located near state and national parks. Each property is made up of separate cabins. The chain has 10 properties with an average of 15 cabins at each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 80 percent, based on a 180-day season. The properties are closed from late fall until early spring. The average rate was $225 per night per cabin. The basic unit of operation is the "night," which is one cabin occupled for one night. The operating Income for year 1 Is as follows. Vernon Cabins Operating Income Year 1 Sales revenue Lodging $ 4, 860,080 Incidentals 475,280 Forfeited deposits 129, 680 Total revenues $ 5,464,809 Costs Labor $ 1, 748, 089 Incidentals 451, 280 Miscellaneous 86, 480 Utilities, etc. 95,090 Depreciation 550,080 Management 120, 080 Marketing Property taxes 1, 640,080 Total costs $ 4,920, 680 Operating profit $ 544, 280 Other revenues consist of Incidentals (vending machine purchases, supplies, and so on) and forfeited deposits. In year 1, Incidentals revenue averaged $22 per night. Reservations require a deposit. Guests who fall to cancel before three nights prior to a stay forfelt the deposit. In year 1, forfeited deposits averaged $6 per night. In year 1, the average fixed labor cost was $110,000 per property. The remaining labor cost was variable with respect to the number of nights. The costs of Incidentals Include $30,000 per season per property. The remaining cost of Incidentals is variable with respect to the number of nights. Miscellaneous costs are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and property taxes) are fixed for the firm. At the beginning of year 2, Vernon will close one of its properties with no change In the average number of rooms per property. The occupancy rate is expected to decrease to 70 percent. Management has made the following additional assumptions for year 2: The average room rate will Increase by 10 percent. Incidental revenues per night are expected to Increase by 5 percent. The forfeited deposit revenue per night is not expected to change. The fixed labor cost is expected to Increase by 12 percent per property. The variable labor cost per night is not expected to change. Incidental cost factors are not expected to change. The miscellaneous cost for a night is expected to Increase by 25 percent. Utilities costs per property are expected to Increase by 20 percent. Depreciation costs per property are forecast to remain unchanged. Management costs will increase by 4 percent and marketing costs will decrease by 6 percent. Property taxes will decrease by $180,000 with the closing of the one property.Required: Prepare a budgeted Income statement for year 2. Vernon Cabins Operating Income Year 2 Sales revenue Lodging Incidentals Forfeited deposits Total revenues Costs Labor Incidentals Miscellaneous Utilities, etc. Depreciation Management Marketing Property taxes Total costs Operating profit