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Shown here are condensed income statements for two different companies (assume no income taxes). Miller Company Sales $ 1,150,000 Variable expenses (80%) 920,000 Income before
Shown here are condensed income statements for two different companies (assume no income taxes).
Miller Company | |
---|---|
Sales | $ 1,150,000 |
Variable expenses (80%) | 920,000 |
Income before interest | 230,000 |
Interest expense (fixed) | 66,000 |
Net income | $ 164,000 |
Weaver Company | |
---|---|
Sales | $ 1,150,000 |
Variable expenses (60%) | 690,000 |
Income before interest | 460,000 |
Interest expense (fixed) | 296,000 |
Net income | $ 164,000 |
2. What happens to each company's net income if sales increase by 50%?
Note: Round your answers to nearest whole percent.
4. What happens to each company's net income if sales decrease by 20%?
Note: Round your answers to nearest whole percent.
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