Manaji Pty Ltd is a large computer chip manufacturing business. Its income statement is as follow:

Manaji Pty Ltd

Income Statement

for the Year Ended December 31, 2021

Sales revenue $50,000

Less cost of goods sold $20,000

Gross margin $30,000

Expenses $15,000

Net income $15,000

Kutral Pty Ltd is a small accounting firm business. Its income statement is as follows:

Kutral Pty Ltd

Income Statement

for the Year Ended December 31, 2021

Revenue $50,000

Expenses $40,000

Net income $10,000

During the financial year ending 31 December 2021, both businesses incurred a $10,000 fraud loss.

Required

1. How much additional revenue must each business generate to recover the losses from the fraud?

(2 + 2 = 4 marks)

2. Explain why these amounts are different (1 mark)

3. Explain for which company (Manaji or Kutral) it would it be easier to generate the additional revenue to recover the fraud losses. (1 mark)