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[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
[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 | ||
Sales | $ | 1,250,000 |
Variable expenses (80%) | 1,000,000 | |
Income before interest | 250,000 | |
Interest expense (fixed) | 58,000 | |
Net income | $ | 192,000 |
Weaver Company | ||
Sales | $ | 1,250,000 |
Variable expenses (60%) | 750,000 | |
Income before interest | 500,000 | |
Interest expense (fixed) | 308,000 | |
Net income | $ | 192,000 |
Required: 1. Compute times interest earned for Miller Company and for Weaver Company..
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