Prepare new income statements for the firms

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Question - To complete this assignment, write your answer in a Microsoft Word document, being sure to include your name. Your answer must include your complete calculations and an explanation that is concise and professional.

 

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) Prepare new income statements for the firms assuming each sells one unit less (i.e. each firm sells 9 units)

b) Briefly - in 150 words or less - describe the effect of cost structure on profitability, including recommendations for each company given the current economic environment, as you understand it.

Reference no: EM131765496

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