Required information. Problem 11-5A (Algo) Computing and analyzing times interest earned LO A1 [The following information...

Transcribed Image Text:

Required information. Problem 11-5A (Algo) Computing and analyzing times interest earned LO A1 [The following information applies to the questions displayed below.] Shown here are condensed income statements for two different companies (assume no income taxes). Miller Company $ 1,250,000 Sales Variable expenses (80%) Income before interest Interest expense (fixed) Net income Weaver Company Sales Variable expenses (60%) Income before interest Interest expense (fixed) Net income 1,000,000 250,000 68,000 $ 182,000 $ 1,250,000 750,000 500,000 318,000 $ 182,000 Problem 11-5A (Algo) Part 1 Required: 1. Compute times interest earned for Miller Company and for Weaver Company. Times interest earned for Miller Company and Weaver Company Choose Numerator: Choose Denominator:- Times interest earned Times interest earned Problem 11-5A (Algo) Part 2 2. What happens to each company's net income if sales increase by 20% ? (Round your answers to nearest whole percent.) Company Miller Company Weaver Company Net income % % 3. What happens to each company's net income if sales increase by 30% ? (Round your answers to nearest whole percent.) Company Miller Company Weaver Company Net income Required information. Problem 11-5A (Algo) Computing and analyzing times interest earned LO A1 [The following information applies to the questions displayed below.] Shown here are condensed income statements for two different companies (assume no income taxes). Miller Company $ 1,250,000 Sales Variable expenses (80%) Income before interest Interest expense (fixed) Net income Weaver Company Sales Variable expenses (60%) Income before interest Interest expense (fixed) Net income 1,000,000 250,000 68,000 $ 182,000 $ 1,250,000 750,000 500,000 318,000 $ 182,000 Problem 11-5A (Algo) Part 1 Required: 1. Compute times interest earned for Miller Company and for Weaver Company. Times interest earned for Miller Company and Weaver Company Choose Numerator: Choose Denominator:- Times interest earned Times interest earned Problem 11-5A (Algo) Part 2 2. What happens to each company's net income if sales increase by 20% ? (Round your answers to nearest whole percent.) Company Miller Company Weaver Company Net income % % 3. What happens to each company's net income if sales increase by 30% ? (Round your answers to nearest whole percent.) Company Miller Company Weaver Company Net income