Question
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Munoz Jordan Number of customers (a) 85 85 Sales
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Munoz Jordan Number of customers (a) 85 85 Sales revenue (a $230) $ 19,550 $ 19,550 Variable cost (a $180) N/A (15,300 ) Variable cost (a $0) 0 N/A Contribution margin 19,550 4,250 Fixed cost (15,300 ) 0 Net income $ 4,250 $ 4,250 Required Reconstruct Munozs income statement, assuming that it serves 170 customers when it lures 85 customers away from Jordan by lowering the sales price to $130 per customer. Reconstruct Jordans income statement, assuming that it serves 170 customers when it lures 85 customers away from Munoz by lowering the sales price to $130 per customer.
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