Income statements for three companies are provided below:
$\begin{array}{lrrr}
&\text { company A }&\text { company B }&\text { company C }\
\text { Sales (20 units) } & \$ 1,000 & \$ 1,000 & \$ 1,000 \
\text { Less variable costs } & 600 & 300 & 0 \
\text { Less fixed costs } & 200 & 500 & 500 \
\text { Jet income } & \$ 200 & \$ 200 & \$ 200
\end{array}$
Required:Prepare new income statements for the firms assuming each sells one additional unit (i.e. each firm sells 21 units)Briefly describe the effect of cost structure on profitability.

Question

Income statements for three companies are provided below:
 $\begin{array}{lrrr}
&\text { company A }&\text { company B }&\text { company C }\
\text { Sales (20 units) } & \$ 1,000 & \$ 1,000 & \$ 1,000 \
\text { Less variable costs } & 600 & 300 & 0 \
\text { Less fixed costs } & 200 & 500 & 500 \
\text { Jet income } & \$ 200 & \$ 200 & \$ 200
\end{array}$
 Required:Prepare new income statements for the firms assuming each sells one additional unit (i.e. each firm sells 21 units)Briefly describe the effect of cost structure on profitability.

Quizplus · Accepted Answer

The Answer of Income statements for three companies are provided below:
 $\begin{array}{lrrr}
&\text { company A }&\text { company B }&\text { company C }\
\text { Sales (20 units) } & \$ 1,000 & \$ 1,000 & \$ 1,000 \
\text { Less variable costs } & 600 & 300 & 0 \
\text { Less fixed costs } & 200 & 500 & 500 \
\text { Jet income } & \$ 200 & \$ 200 & \$ 200
\end{array}$
 Required:Prepare new income statements for the firms assuming each sells one additional unit (i.e. each firm sells 21 units)Briefly describe the effect of cost structure on profitability.

Income Statements for Three Companies Are Provided Below Required:Prepare New Income Statements for the Firms Assuming Each Sells