Prepare new income statements

Reference no: EM1351319

Income statements for three companies are provided below:

Company A Company B Company C
Sales (10 units) $600 $600 $600
Less variable costs 400 250 0
Less fixed costs 100 250 500
Net income $100 $100 $100

a) Make new income statements for companies assuming each sells one unit less (i.e. each firm sells 9 units).

b) Briefly describe the effect of cost structure on profitability, including recommendations for each company given the current economic environment.

Reference no: EM1351319

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