Question
Shown here are condensed income statements for two different companies (both are organized as LLCs and pay no income taxes). Miller Company Sales $1,000,000 Variable
Shown here are condensed income statements for two different companies (both are organized as LLCs and pay no income taxes).
Miller Company
Sales $1,000,000
Variable expenses (80%) 800,000
Income before interest 200,000
Interest expense (fixed) 60,000
Net income $140,000
Weaver Company
Sales $1,000,000
Variable expenses (60%) 600,000
Income before interest 400,000
Interest expense (fixed) 260,000
Net income $140,000
What happens to each company's net income if sales increase by 30%? (Round your answers to nearest whole percent.)
What happens to each companys net income if sales increase by 50%? (Round your answers to nearest whole percent.) |
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