Question: Can someone help me determine the correct responses to this question? A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.)
Can someone help me determine the correct responses to this question? 




A contribution income statement for the Nantucket Inn is shown below. (Ignore income taxes.) Revenue Less: Variable expenses Contribution margin Less: Fixed expenses $ 2,100,000 1,260,000 $ 840,000 672,000 $ 168,000 Net income 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 $2,100,000? 4. Use the operating leverage factor to calculate the increase in net income resulting from a 25 percent increase in sales revenue. 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 Percent Revenue % Variable expenses Contribution margin $ 2,100,000 1,260,000 $ 840,000 672,000 $ 168,000 % Fixed expenses Net income % Required 1 Required 2 Required 3 Required 4 Suppose the hotel's revenue declines by 20 percent. Use the contribution-margin percentage to calculate the resulting decrease in net income. Decrease in net income Required 1 Required 2 Required 3 Required 4 What is the hotel's operating leverage factor when revenue is $2,100,000? Operating leverage factor Required 1 Required 2 Required 3 Required 4 Use the operating leverage factor to calculate the increase in net income resulting from a 25 percent increase in sales revenue. Increase in net income %
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