On Company and Off Company report the following results:

On

Off

Sales	$3,000,000	$3,000,000
Variable costs	1,200,000	1,800,000
Fixed costs	1,000,000	400,000

Both companies increase sales next year by $500,000. Which company will have the higher profit next year?

Answer

		Neither; both companies will have the same profit.
		On will have higher profit ($100,000 greater than Off).
		Off will have higher profit ($100,000 greater than On).
		Off will have higher profit ($200,000 greater than On).