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The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Kent Trent Number of customers (a) 85 85 Sales
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Kent Trent Number of customers (a) 85 85 Sales revenue (a x $230) 19,550 19,550 NIA (15,725) N/A Variable cost (a x $185) Variable cost (a x SO) Contribution margin 19,550 3,825 (15,725) Fixed cost Net income 3,825 3,825 Required a. Reconstruct Kent's income statement, assuming that it serves 170 customers when it lures 85 customers away from Trent by lowering the sales price to $130 per customer KENT Income Statement Sales revenue Variable cost 0 Contribution margin Fixed cost Net income (loss)
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